Australian shares are firmer despite the continuation of a US Congressional stand-off over budget negotiations.

Wall Street and European equity markets dropped overnight as the partial US government shutdown entered its third day.

But the local market edged higher, on expectations a resolution will soon be achieved in the US, Australian Stock Report senior equities analyst Benny Sada said.

“There is some hope that this is not the end of the talks,” he said.

“Within the Republican Party there is a growing division among members of the party who are actually wanting some deal done and other members who are intent on leaving the government shut down.”

Improving commodity prices helped the big mining companies.

BHP Billiton was up 35.5 cents to $35.67, Rio Tinto was 58 cents higher at $60.87 and Fortescue Metals had gained five cents to $4.83.

The big four banks were all higher, with ANZ up 18 cents at $31.08, Commonwealth up 23 cents at $71.90, Westpac had gained 30 cents to $32.73 and National Australia Bank was 42 cents higher at $34.94.

The industrial sector was the only weak spot in the market, as construction giant Leighton Holdings was down $1.80, or 9.19 per cent.

That fall comes after media reports of allegedly corrupt practices in its international operations.

KEY FACTS

* At 1200 AEST on Tuesday, the benchmark S&P/ASX200 index was up 31.8 points, or 0.61 per cent, at 5,247.4.

* The broader All Ordinaries index was up 29.6 points, or 0.57 per cent, at 5,244.5.

* The December share price index futures contract was 37 points higher at 5,249, with 13,979 contracts traded.

* National turnover was 554 million securities worth $1.1 billion.