The Australian sharemarket marched to its own tune on low volume as it shrugged off the US fiscal cliff fears to close at an 18-month high on Chinese growth optimism.
Overnight Wall Street bounced back from steep early losses to close slightly in the red after the US House of Representatives scheduled a session on Sunday to deal with the looming budget crisis.
The S&P/ASX 200 index rose 23.3 points, or 0.5 per cent, to 4671.3 points, but finished off the day's high as comments from Senate majority leader Harry Reid that "it looks like that (over the cliff) is where we're headed" tempered optimism.
""It is quite impressive but volumes are extremely light so despite the gains it can't be taken too seriously," Commsec market analyst Steve Daghlian said.
Domestic sentiment was buoyed by the ongoing rise in spot iron ore, up $US4 to $US139.40 a tonne yesterday, while bellwether industrial metal copper extended overnight gains, rising another 0.4 per cent to $US7950 a tonne. Gold edged up $US4 to $US1662 an ounce.
In Japan stocks shrugged off evidence the country remained firmly in the grip of deflation, with the Nikkei index climbing 0.7 per cent despite the 1.7 per cent drop in October industrial production, stagnant retail sales and 0.1 per cent fall in consumer price inflation, all worse than forecast.
The index has soared almost 20 per cent since mid-November and the yen has fallen to a 28-month low, on expectations the Bank of Japan would soon be forced into extraordinary monetary stimulus measures by the new government.
The Shanghai composite index was up 0.3 per cent at the close of the ASX.
The Australian dollar was steady at $US1.0375 but hit a 20-month high of 89.93 yen.More to come
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