Australia shares extend surge to fresh 17-month high

SYDNEY Thu Dec 20, 2012 7:04pm EST

SYDNEY Dec 21 (Reuters) - Australian shares rose 0.5 percent on Friday, led by banks and miners, extending a surge that has taken them to 17-month highs into a fourth day, after U.S. stocks rose on signs of modest progress in U.S. budget negotiations.

Banks all rose, with Westpac Banking Corp leading gains, jumping 1.2 percent.

Miner BHP Billiton Ltd rose 0.7 percent while Rio Tinto Ltd was up 0.6 percent.

The benchmark S&P/ASX 200 index was up 22.5 points at 4,656.6 by 2352 GMT. The market has advanced 13.8 percent over 2012.

"Risk assets reversed losses once again, driven by headlines regarding the fiscal cliff negotiations," said Stan Shamu, market strategist at IG Markets.

"House Speaker John Boehner's pledge to work with President Obama was enough to improve sentiment."

Defensives were strong, with blood products maker CSL Ltd rising 0.6 percent and diversified retailer Wesfarmers was up 0.5 percent.

New Zealand's benchmark NZX 50 index inched up 0.2 percent to 4,082. (Reporting by Thuy Ong; Editing by Eric Meijer)

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