The share market closed at a 19-month high in light post-Christmas trade, while there were solid gains in most sectors with the exception of telco stocks.
The All Ordinaries index rose 0.5 per cent to close at 4,685, while the ASX 200 gained the same amount, to 4,671.
The result puts Australia's share market on track for its best annual gain since 2009, with one more trading day left in the year.
Stocks jumped at the open after the US House of Representatives announced it would meet on Sunday (local time) to try to resolve the deadlock over budget negotiations.
Mining stocks dug deep today, extending their run of gains with the iron ore price at an eight-month high.
Fortescue Metals rose 2.4 per cent to close at $4.64, Rio Tinto added 1.7 per cent and BHP Billiton advanced by 1.1 per cent.
Smaller iron ore miners, meanwhile, saw bigger gains.
Retail stocks also rose as investors pinned their hopes on strong post-Christmas sales.
The department stores David Jones and Myer both rose just under 1 per cent.
Economists say the feedback they are receiving from Australian retailers is that spending at the post-Christmas sales has been reasonable, but not spectacular.
The Australian Retailers Association expects $14.8 billion will be spent around the country from Boxing Day to mid-January.
The big four banks all climbed today, with Westpac seeing the largest rise, up two thirds of a per cent to $26.27.
Telstra, however, slipped back from its four-year high yesterday, closing down one cent to $4.39.
On the commodity markets, spot gold jumped to $US1,662 an ounce, West Texas crude oil edged slightly higher to $US90.90 a barrel, while Tapis crude was relatively steady at $US116.80 a barrel.
The Australian dollar, meanwhile, was relatively steady against most of its major counterparts.
But it was making headway against the yen after Japan's new prime minister raised hopes of more monetary easing to weaken the country's persistently high currency and help Japan's exporters.
About 5pm (AEDT) the dollar was buying 103.7 US cents, 78.4 euro cents, 89.7 Japanese yen and 64.4 British pence.