Aust stocks closes at 16 month high

THE Australian market finished on a 16-month closing high as US politicians appeared to make progress on their budget negotiations .

At close on Tuesday, the benchmark S&P/ASX200 index was up 21.8 points, or 0.48 per cent, at 4,595.2 points, while the broader All Ordinaries index had risen 22.5 points, or 0.49 per cent, to 4,610.5 points.

On the ASX 24, the December share price index futures contract was 29 points higher at 4,602 points, with 167,860 contracts traded.

Australian Stock Report head of research Geoff Saffer said the Australian market had its highest close since late July 2011 after US politicians appeared to be making progress on their "fiscal cliff" negotiations.

Just two weeks remain before tax increases and government spending cuts, referred to as the fiscal cliff, start taking effect in the US if no deal is reached.

"I think it was mainly widespread buying today on hopes that US politicians will reach a compromise before the end of the year," he said.

Mr Saffer said the Reserve Bank of Australia's minutes of its December board meeting also suggested that the cash rate could be cut further in 2013 which prompted investor buying.

The Australian market recorded gains across the board with mining, utilities and healthcare the best performing sectors.

BHP Billiton jumped 31 cents to $36.66, Rio Tinto soared $1.18 to $64.70 and Fortescue gained 13 cents to $4.60.

The four major banks all finished in positive territory.

ANZ was up two cents to $24.51, National Australia Bank gained 12 cents to $24.60, Westpac added six cents to $25.81 and Commonwealth Bank jumped 16 cents to $61.45.

The spot price of Sydney gold closed at $US1,702.59, up $US10.84 from Monday's close of $US1,691.75.

Market turnover was 1.77 billion securities worth $4.99 billion, with 536 stocks up, 434 down and 352 unchanged.

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Aust bonds lower after RBA minutes

AUSTRALIAN bond futures prices were lower after the release of the minutes from the Reserve Bank of Australia's latest board meeting reduced traders' expectations of future interest rate cuts.

RBC Capital Markets fixed income strategist Su-Lin Ong said local bond futures prices fell following the release of the RBA's minutes at 1130 AEDT.

"The minutes from the December meeting suggested it was quite a close decision and I guess the interpretation is that with the cash rate down to three per cent the hurdle to cut further may be quite high," she said.

"So that weighed quite high on fixed income markets."

The RBA cut the cash rate to three per cent in December, from 3.25 per cent previously.

Ms Ong said developments in negotiations on the 'fiscal cliff' of tax hikes and spending cuts due to apply in 2013, unless US political leaders can agree to alternative measures, was likely to drive bond markets over the coming days.

"I think most attention is on these fiscal cliff negotiations, we have had some progress since the weekend and I think there is an expectation that we are inching closer to both a compromise and agreement," Ms Ong said.

US President Barack Obama has offered a proposal to House of Representatives Speaker John Boehner which would raise revenue by $US1.2 trillion ($A1.14 trillion), and cut spending by the same amount.

At 1630 AEDT on Tuesday, the March 10-year bond futures contract was at 96.640 (implying a yield of 3.360 per cent), down from 96.670 (3.330 per cent) on Monday.

The March three-year bond futures contract was trading at 97.220 (2.780 per cent), down from 97.235 (2.765 per cent).

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Man faces 10 years jail over flight abuse

AN international flight was diverted after a drunken Perth man allegedly tried to smoke a cigarette on the plane before punching and spitting on crew members.

The 34-year-old man was taken off the flight, enroute from Sydney to Japan on Monday night, when it was diverted to Cairns.

Australian Federal Police (AFP) allege the man was heavily intoxicated and was abusive towards the crew and other passengers.

He had to be forcibly restrained by the crew and was arrested when the plane landed in Cairns, police said.

Assistant commissioner Shane Connelly said the public needed to remember that when they travelled on an aircraft their behaviour was subject to Australian laws.

"Enough is enough. An aircraft captain and co-pilot can ill-afford to be distracted from their duties of safely flying an aircraft by having to deal with drunk, violent or disorderly passengers," he said.

"The cabin crew are there to make your flight safe and enjoyable.

"They should not have to restrain violent passengers, be abused or assaulted, or be interfered with in conducting their duties."

AFP responded to more than 1000 alcohol-related incidents at Australia's 10 major airports during the 2011-12 financial year.

Out of those incidents, 145 were for offences related to offensive and disorderly behaviour and excessive alcohol consumption.

AFP said the plane was forced to dump its fuel load when it diverted to Cairns and the airline would seek to recover significant costs.

The man was due to face Cairns Magistrate Court on Tuesday charged with smoking in an aircraft, disorderly and offensive behaviour on board an aircraft, and interfering with crew or aircraft.

The offences carry a maximum penalty of two years imprisonment.

He will also be charged with assaulting crew general, which carries a maximum penalty of 10 years imprisonment.

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Price cut for some SA power users

The SA government has negotiated price cut for around 20 per cent of the state's electricity users. Source: AAP

ABOUT 200,000 South Australian households will get an electricity price cut from January, with the state government indicating more will follow in a looming discounting war.

The government has negotiated a 9.1 per cent price cut for about 20 per cent of the state's electricity consumers in return for locking in the new prices for two years.

Small businesses will get a 4.5 per cent price cut under the same deal.

The Essential Services Commission of South Australia (ESCOSA) will also lose its price-setting powers from February when the state's electricity market becomes fully deregulated.

The government says the new deal will benefit all consumers, including those on cheaper market contracts, as increased competition among existing and new retailers prompts a "race to the bottom".

"With the deregulation of the electricity retail market here in South Australia, we will see a price war that will put further downward pressure on electricity prices," Premier Jay Weatherill told reporters on Tuesday.

"This is a fantastic present for South Australian energy consumers."

Mr Weatherill said ESCOSA would remain in place to monitor prices and the government would reintroduce regulation at the first sign of collusion or other anti-competitive behaviour involving energy retailers.

Acting Prime Minister Wayne Swan said South Australia was the first state to act on the Council of Australian Governments (COAG) agreement earlier this year on energy market reform.

"This decision is a great result for people of SA and will mean greater competition, more choice and lower prices," Mr Swan said in a statement.

The South Australian Council of Social Services also welcomed the price cut, which it said would save the average household $180 a year.

The Energy Retailers Association of Australia and the Energy Supply Association of Australia both welcomed the changes and said the deregulation would offer consumers more choice and better services.

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Mandela treated for gall stones

SA anti-apartheid hero Nelson Mandela has undergone a successful procedure to remove gall stones. Source: AAP

SOUTH African anti-apartheid hero Nelson Mandela has undergone a successful procedure to remove gall stones a week after being admitted to hospital for a lung infection.

"The medical team decided to attend to a lung infection before determining when to attend to the gall stones", a statement from the office of the president said on Saturday.

The 94-year-old is being treated at a private hospital in the capital Pretoria. Initial tests revealed he was suffering from a recurring lung infection.

The former president underwent a procedure via endoscopy to have the gall stones removed, the statement said.

"The procedure was successful and Madiba is recovering," it added, using the clan name by which Mandela is affectionately known.

Mandela was previously hospitalised for an acute respiratory infection in January 2011, when he was kept for two nights before being released for home-based care and intense medical monitoring.

Mandela has a long history of lung problems, dating back decades to when he contracted tuberculosis while in prison.

The Nobel Peace Prize winner who led the country to democracy in 1994 was flown from his rural home village of Qunu to Pretoria on December 8.

It was not clear when Mandela was moved to the private hospital from the One Military facility, the country's top military healthcare centre, where government officials initially said Mandela was being treated.

The Mediclinic Heart Hospital, where he is currently being cared for, bills itself as the first and "only hospital of its kind - a private, specialised heart hospital - in South Africa."

A doctor who spoke to AFP said gall stones were not a serious ailment and can happen to anybody.

"They occur when fluid collects in your gall and crystalises. The stones can cause discomfort," said Mark Sonderup, vice chairman of the South African Medical Association.

The presidency appealed for privacy for Mandela and his family. Local and international media have been camped outside his home and the hospital.

News of Mandela's hospitalisation always causes panic among South Africans, as the elderly statesman is hardly seen in public.

Television images earlier this year showed the tall, grey-haired icon seated on a couch at his rural home, surrounded by grandchildren.

Mandela stepped down from office in 1999 after serving one term, in 2004 he announced his retirement from public life, but continued to make a few public appearances.

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Union warned about WA dock's safety issues

A KARRATHA man's arm was crushed as he worked at the dock supplying Chevron's massive Gorgon LNG project in Western Australia on Saturday, the Maritime Union of Australia (MUA) says.

The man was airlifted to a Perth hospital after his arm became trapped between the dock and a barge at the Mermaid Marine Supply base in Dampier, which is used exclusively by Chevron.

MUA WA secretary Chris Cain described Chevron and its contractor as "cowboys", saying poor safety standards had been a problem at the Mermaid Marine Supply base for months.

"It's becoming clearer and clearer that Chevron and their contractors like Mermaid are cutting corners to make up time and money on the Gorgon project," Mr Cain said.

The union said WorkSafe WA had been warned that poor training and management made an accident "inevitable".

Safety representatives had arranged for WorkSafe WA inspectors to visit the site on Friday.

"We've got serious issues when the day after WorkSafe says there's no problem, ambulances are called to an accident of the type exactly predicted by health and safety representatives," Mr Cain said.

The union said the accident raised serious questions that need to be answered, such as why WorkSafe was called to investigate the accident hours after it happened.

WorkSafe and Mermaid Marine have been contacted for comment.

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Grassfire 'out of control' near Young

FIREFIGHTERS are battling an out-of-control grassfire burning near properties in southwestern NSW.

The fire, covering 4600 hectares, is burning at Geegullalong Road, around eight kilometres east of Murringo, near Young.

NSW Rural Fire Service (RFS) spokesman Ben Shepherd said 140 firefighters, 43 fire trucks and six aircraft were trying to bring the fire under control.

He said fire crews were working to protect a number of rural properties in the area but no residents had been evacuated from their homes.

Locals were being advised to stay in their homes as the fire-front approached, he said.

"A lot of people have done some preparation around their property and we are moving crews into those properties as the fire-front arrives," he told AAP.

He said the Lachlan Valley Way was closed in the area because of the fire.

Strong winds were pushing the fire in a north and north-easterly direction, and it was unlikely the blaze would be brought under control on Sunday night, Mr Shepherd said.

The RFS have issued a watch and act alert for the area.

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US school victims mostly six years old

Police say the gunman who shot dead 20 school children at a US school forced his way in. Source: AAP

SHATTERED families and grieving residents are devastated that most of the 27 people shot dead by a US school gunman are children aged just six and seven.

President Barack Obama is due to join the vigils in the small Connecticut community of Newtown on Sunday, to lead national mourning after this latest massacre that has revived calls for a debate on gun control.

But the political ramifications of the tragedy are far from the minds of most in this picturesque town, where parents of the survivors and the dead are struggling to come to terms with the stunning loss.

Robbie Parker, a 30-year-old hospital assistant who cares for sick newborns, says the death of his loving six-year-old Emilie should "inspire us to be better, more compassionate and caring toward other people."

He included the family of the apparent shooter, 20-year-old Adam Lanza, in his condolences, addressing them through the news media to say: "I can't imagine how hard this experience must be for you."

Robert and Diane Licata described how their six-year-old son Aiden ran past the shooter in his classroom doorway to escape after seeing his teacher gunned down - and recounted their desperate search for him.

Diane Licata told CNN she had rushed to the school to see her daughter led out of the building but there was no sign of Aiden.

"So the kids start to come out and when I saw her, you know, the sense of relief is incredible, but it's really short-lived because I still have one in there. And I'm waiting for him to come. And he didn't come out," she said.

"When you're standing there waiting....it's an indescribable feeling of helplessness."

Licata eventually received a text that her son was safe at a nearby police station.

Aiden was later able to explain his escape.

She said his class heard noises that initially sounded like hammers.

"Then they realised that it was gunshots."

"Aiden's teacher had the presence of mind to move all of the children to a distance away from the door... and that's when the gunman burst in," Licata said.

The gunman had "no facial expressions" she said, adding that he "proceeded to shoot their teacher."

Many US children are taught how to react during an emergency, so Aiden and his classmates quickly made their way to the door where the gunman was standing and ran past him. Some of them survived.

"He (Aiden) really, really, really cared about his teacher. He knows that she's been hurt but he doesn't know the end result. He knows the kids that he saw getting shot."

A police spokesman said Lanza is believed to have shot his mother at the home they shared before launching his attack at the nearby school.

He had two handguns but the coroner told reporters that most of the children and staff were killed by multiple gunshots from his assault rifle, a .223 calibre Bushmaster, a civilian version of the US military's M4.

Lanza's father Peter expressed shock and grief at the horror caused by his son.

"No words can truly express how heartbroken we are," he said in a statement vowing to continue co-operating with law enforcement.

"We, too, are asking why?"

Connecticut State Police released the identity of the victims, aged six to 56. They included 16 six-year-olds and four seven-year-olds.

Twelve of the 20 slain children were girls and eight were boys.

The six adults killed were all women, including the school's principal and its psychologist.

The motives of the shooter are still the biggest mystery.

Asked whether any suicide note, emails or other clues to the killer's mind had been found, Connecticut State Police spokesman Lieutenant J Paul Vance said investigators have gathered "some very good evidence."

Lanza was a shy, awkward and nerdy boy but hadn't apparently given any warning sign that he was a mass murderer.

The weapons, news reports said, were registered in his mother's name but she was widely seen as an upstanding resident in the town.

The tragedy drew messages of support from around the world, and candlelight vigils are being held.

Of all US campus shootings, the toll was second only to the 32 murders in the 2007 massacre at Virginia Tech University.

The latest number far exceeded the 15 killed in the 1999 Columbine High School massacre, which triggered a fierce but inconclusive debate about gun control laws in the United States.

However, the White House has scotched any suggestion that the politically explosive subject would be quickly reopened.

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Scrap metal yard on fire in Sydney's west

A LARGE fire has broken out at a scrap metal yard in sydney's west.

A fire and rescue spokesman said six firefighting crews were sent to the scrap yard in Greenacre just after 6.30pm (AEDT) on Friday.

The fire will burn for a long time time, the spokesman said.

"It's scrap metal so it has oil, plastics, paint ... but then once you heat up aluminium then it will burn as well," he told AAP.

"We may end up having to keep a fire engine there all night."

One person has suffered burns and been taken to hospital, the spokesman added.

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Russia develops new long-range missile

RUSSIA is developing a new intercontinental ballistic missile, the military has announced, in an apparent attempt to remind the United States of Moscow's rocket capacities.

Revealing the existence of the project for the first time, rocket forces commander General Sergei Karakayev said that several test launches of prototypes had already taken place and the work was on the "right path", Russian state media said on Friday.

Karakayev said the latest test was on October 24 at the Kapustin Yar firing range in the Astrakhan region of southern Russia.

He appeared to link the solid-fuel missile's development to controversial US plans to install missile defence systems in central Europe which have long angered Moscow.

"The solid fuel missile will allow us to realise possibilities like the creation of a high-precision strategic missile with a non-nuclear warhead with practically global range," Karakayev was quoted as saying by the state RIA Novosti news agency.

He said that the new 100-tonne missile would be able to overcome any existing missile defence system.

Karakayev added the missile would also be effective in combating any future missile defence system that the United States could install in space.

He said that the missile would ultimately replace Russia's new generation of intercontinental missiles the Yars and Topol-M.

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