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Australia shares rise to 19-month high on US fiscal talks

australian-stocksMELBOURNE: Australian shares climbed to a 19-month high in the first trading session of 2013, led by top miners, after the US Senate passed a bill to avert tax hikes and spending cuts that could push Australia's top foreign investor back into recession.


The benchmark S&P/ASX 200 index, which ended 2012 up 14.6 percent, its best annual gain since 2009, rose 1 percent to 4,695 as of 0157 GMT. That was the highest since June 1, 2011.


US lawmakers have struggled to find a way to head off $600 billion of tax hikes and spending cuts, a legacy of earlier failed budget deals that is known as the fiscal cliff. All eyes are on the Republicans in the House of Representatives as they vote on the Senate bill.


 "They will get it done. We're pretty confident a deal will be struck in the next few days. There's a political and fiscal imperative that the fiscal cliff is avoided," said Martin Lakos, private wealth adviser at Macquarie Bank.


"Markets are up today in anticipation of that. There's an expectation that there will be a compromise and a deal struck," he said.


Lakos said he was expecting a better year provided earnings results lived up to expectations and improved stock values, starting with the February reporting season.


"That's going to be key for our market going forward. We've seen PE (price-to-earnings) expansion, so we now need to see earnings growth following that. That's potentially a point of disappointment if we don't see that coming through," said Lakos.


The New Zealand market remains closed for a holiday on Wednesday.


US stocks closed out 2012 with their strongest day in more than a month, putting the S&P 500 up 13.4 percent for the year.

Center>Copyright Reuters, 2013


Index Closing Chg%
Arrow DJIA 17,798.49 0.08
Arrow Nasdaq 5,127.52 0.22
Arrow S&P 2,090.11 0.06
Arrow FTSE 6,375.15 0.28
Arrow DAX 11,293.76 0.24
Arrow CAC-40 4,930.14 0.32
Arrow Nikkei 19,883.94 0.30
Arrow H.Seng 22,068.32 1.87
Arrow Sensex 26,128.20 0.65

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Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-2.197 bln
Exports $1.729 bln
Imports $3.926 bln
WeeklyNovember 23, 2015
Reserves $19.713 bln