The Australian sharemarket is expected to follow a strong lead from Wall Street as it looks like the US will avoid the so called fiscal cliff.
Legislation to roll back a series of tax hikes and spending cuts that threatened to send the US back into recession has passed the Senate and is awaiting passage through the Republican-controlled House of Representative.
On Monday, optimism about a successful deal between the White House and Congress sent US shares higher, with the Dow Jones index rising 1.28 per cent to 13,104.14 points.
However, earlier on New Year's Eve, Australia's benchmark S&P/ASX200 index closed a shortened session down 22.4 points, or 0.48 per cent, at 4648.9 points, while the broader All Ordinaries index fell 20.7 points, or 0.44 per cent, to 4664.6 points. On the ASX 24, the March 2013 share price index futures contract was 30 points lower at 4616 points, on volume of 14,233 contracts traded.
During the local session on Wednesday The Australian Industry Group will release its performance of manufacturing (PMI) index for December.