Australia Markets closed

Aust shares finish 0.3% higher

The Australian share market has continued its stellar run, finishing higher despite falls on Wall Street amid caution about the outcome of the US budget talks.

At the close on Thursday, the benchmark S&P/ASX200 index was 16.3 points, or 0.35 per cent higher at 4,634.1, while the broader All Ordinaries index was up 13.4 points, or 0.29 per cent, at 4,646.6.

On the ASX 24, the March share price index futures contract was five points higher at 4,608, with 36,206 contracts traded.

CommSec market analyst Steve Daghlian said Australian shares made solid progress later in the session, rising over six per cent over the past five weeks.

"There's no fiscal cliff news and there doesn't seem like there's been huge progress will be made but it does seems like the Republicans and Democrats will vote it through," Mr Daghlian said.

"The futures market was pointing to a flat start but we've picked up."

It followed weak leads from Wall Street after political leaders disagreed overnight about the Republicans' `Plan B' to avoid the fiscal cliff.

The fiscal cliff refers to a series of automatic tax hikes and spending cuts that will come into effect on January 1, and could send the US economy into a recession, if a deal is not reached beforehand.

On Wednesday the Dow Jones industrial average lost 98.99 points, or 0.74 per cent, to 13,251.97 points.

Local financial stocks led the afternoon gains, with all the major banks finishing higher.

ANZ shares closed 16 points higher at $24.80, Commonwealth Bank was 18 cents stronger at $61.51, Westpac added 17 cents to $25.97 and National Australia Bank finished eight cents higher at $24.88.

In contrast, major resources stocks finished lower, with Rio Tinto down 41 cents to $65.30, BHP Billiton had shed two cents to $37.04 and Fortescue Metals had given up 16 cents to $4.50.

In other resources news legal action has been launched over the environmental approval process for Woodside's controversial Browse gas hub at James Price Point in Western Australia.

Woodside shares were 39 cents lower at $33.51.

In local news Qantas' partnership with Emirates is set to receive approval from the competition watchdog, following a draft decision from Australian Competition and Consumer Commission (ACCC).

Qantas shares were one cent stronger at $1.46.

The spot price of Sydney gold closed at $US1,668.58, down $6.57 from Wednesday's close of $US1,675.15.

National turnover was 2.1 billion shares worth $6.6 billion, with 472 shares higher, 445 lower and 348 unchanged.