THE sharemarket has hit 19-month highs after strong gains among the big miners and retail banks.
The benchmark S&P/ASX 200 Index rose 34.8 points, or 0.74 per cent, to 4740.7 on Thursday.
It was the S&P/ASX 200's highest close since it finished the local trading day at 4756.4 on May 19, 2011.
The local market opened up 0.4 per cent, following a strong lead from Wall Street, and extended gains through the day with investors buoyed by the deal over the US fiscal cliff and firmer commodities prices during the overnight session.
Positive data from China also lifted sentiment on equities markets.
Resource-related sectors were among the best performers.
The gold sector climbed 2.73 per cent, metals and minerals companies rose 1.64 per cent and the materials sector advanced 1.5 per cent, according to IRESS data. BHP Billiton rose 31? to $38.15, while Rio Tinto was $1.63 firmer at $69.25.
Financial stocks were 0.41 per cent higher, with the four big retail banks posting gains.
ANZ climbed 9? to $25.18, CBA advanced 52? to $63.24 - a record closing high - NAB rose 15? to $25.25 and Westpac was 9? firmer at $26.19.
"Regional equities are seeing a continuation of the buoyant risk environment in Asia today as investors react to the passing of the fiscal cliff deal," IG markets strategist Stan Shamu said in a research note. "Although some analysts feel this is merely a relief rally as US leaders kick the can down the road, so to speak, it seems to have done the job for now."
IAG said it had raised its catastrophe reinsurance program to $5 billion for 2013, from $4.7 billion in 2012. IAG was up 3? at $4.72.
Brambles rose 10? to $7.69 after the pallet company said it had completed the ?135 million acquisition of intermediate bulk container company Pallecon.
The spot price of gold in Sydney finished at $US1686.43 an ounce, up $US6.25.
Nomura's head of fixed income, Jon Linton, said the local bond market was waiting for direction from overseas markets, especially the US, during the overnight session.
"There isn't much happening locally so I think our market is really in hands of global markets," Mr Linton said.
"We will wait and see what the US does."