Australian shares rose as investors expect the partial US government shutdown to be resolved soon.

With the shutdown of non-essential American public services continuing for a second day, investors were optimistic a political solution would be found for the debt ceiling deadlock, Patersons Securities economist Tony Farnham said.

“The market seems to have brushed aside all those sorts of issues,” he said.

“Investors overseas, and the same for investors here, are trading on the assumption that the politicians will eventually nut out a compromise.”

Banking and property stocks led the market higher, although late falls in those sectors saw the main indices post only modest gains.

Commonwealth Bank gained 32 cents to $71.67, National Australia Bank added 11 cents to $34.52, ANZ was six cents higher at $30.90 and Westpac dropped 11 cents to $32.43.

Falling commodity prices hit the resources sector, with BHP Billiton down 18 cents at $35.31, Rio Tinto dropped 78 cents to $60.29, and gold miner Newcrest shed 45 cents to $10.95.

Linc Energy lost 14.75 cents, or 10.5 per cent, to $1.2575 after announcing plans to delist from the Australian market and list in Singapore.

But uranium miner Paladin Energy added five cents to 53 cents after announcing it would cut more jobs and reduce executive pay to save on spending.

KEY FACTS

* At 1615 AEST the benchmark S&P/ASX200 index was up 8.8 points, or 0.17 per cent, at 5,215.6 points.

* The broader All Ordinaries index was up 8.6 points, or 0.17 per cent, at 5,214.9 points.

* The December share price index futures contract was three points higher at 5,212 points, with 18,265 contracts traded.

* National turnover was 1.68 million securities worth $3.77 billion.