Australia Markets closed

Aust shares closed higher

The Australian market closed higher after investors received a glimmer of hope that US politicians may be able to negotiate to avoid falling off the "fiscal cliff".

At close on Monday, the benchmark S&P/ASX200 index was up 24.6 points, or 0.57 per cent, at 4,361.4, while the broader All Ordinaries index was up 22.5 points, or 0.52 per cent, at 4,382.6.

On the ASX 24, the December share price index futures contract was up 30 points at 4,378, with 22,566 contracts traded.

RBS Morgans private client adviser Bill Bishop said local investors were feeling optimistic on Monday after talks between the US Republican and Democrats to avoid the "fiscal cliff" appeared to be fruitful.

"Americans are feeling a little bit better about the fiscal cliff," he said.

"Our market takes notice of what happens overseas and had a nice little confidence rally."

The "fiscal cliff" refers to a series of planned tax hikes and spending cuts that economists fear could send the US into recession if a compromise is not reached between Democrats and Republicans.

US shares opened lower on Friday but took a jump upwards as the White House opened the talks with congressional leaders.

The Dow Jones Industrial Average finished up 45.93 points (0.37 per cent) at 12,588.31.

In Europe on Friday, London's benchmark FTSE 100 index of top companies closed 1.27 per cent to 5,605.59 points lower and Frankfurt's DAX 30 index slid 1.32 per cent to 6,950.53 points, the first time it has closed below 7,000 points since September 5.

Shares in drilling company Boart Longyear jumped 10.5 cents, or 8.11 per cent, to $1.40 despite it announcing an earnings downgrade, with investors apparently more impressed with the $US70 million ($A68.08 million) cost cutting exercise it has launched.

Troubled retailer Billabong also had its shares surge 7.5 cents, or 10.14 per cent, to 81.5 cents after its head of US business Paul Naude said he was considering taking control of the company.

The mining giants closed mixed.

BHP Billiton soared 28 cents to $33.21, but Rio Tinto dived 19 cents to $56.71 and Fortescue fell five cents to $3.85.

The four major banks also had a mixed day.

National Australia Bank was up 16 cents to $23.38.

However ANZ dropped one cent to $23.65, Westpac fell two cents to $24.40 and Commonwealth Bank dived 13 cents to $58.15.

The Sydney gold price was $1722.69 per fine ounce, up $US8.79 from Friday's close of $US1,713.90.

National turnover was 1.326 billion shares worth $3.025 billion, with 494 shares up, 418 down and 361 unchanged.