The Australian market closed at its highest level for 2012, with stronger commodity prices led to gains for the mining giants.
At the close on Tuesday, the benchmark S&P/ASX200 index was 18.1 points, or 0.4 per cent higher at 4,576, while the broader All Ordinaries index was up 18.9 points, or 0.41 per cent, at 4,581.3.
On the ASX 24, the December share price index futures contract was 15 points higher at 4,582, with 20,119 contracts traded.
The previous closing high of 4,571.1 points was reached on October 19 and the Australian market is now nearly 13 per cent higher for the year.
CMC Market chief market analyst Ric Spooner said iron ore and copper prices been strong in the last few days, giving momentum to the big mining companies.
The market was finishing the year strongly with investors not as gloomy as they had been, amid hopes of Chinese stimulus in the new year and optimism that the US will somehow resolve their debt-related fiscal cliff negotiations, he said.
"Investors acting on the view that looking forward the most likely scenario next year is moderate growth in most international economies including ours," Mr Spooner told AAP.
"Low interest rates is a newer phenomenon in Australia and taking on more risk, getting into equities or a rebalancing of portfolios towards equities is looking a sensible, alternative moderate growth scenario."
BHP Billiton jumped 46 cents to $35.41, Rio Tinto surged 47 cents to $61.77 and Fortescue gained 16 cents to $4.21.
The local market got a positive lead from offshore with Wall Street finishing higher.
In equity news, the owner of the radio station at the centre of the Duchess of Cambridge prank call affair, Southern Cross Media, was up 3.0 cents, or 2.9 per cent at $1.07, rebounding from a 5.8 per cent fall on Monday.
Among the other media stocks, Ten Network Holdings was 0.5 cent up the day after the stock fell about nine per cent following the first part of its $230 million capital raising.
Sydney gold closed at $US1,709.39, up US74 cents from Monday's close of $US1,708.65.
National turnover was 1.305 billion securities worth $3.82 billion, with 482 stocks trading up, 461 down and 359 unchanged.