Australian shares rose 0.4 percent on Thursday, buoyed by defensive stocks while investor sentiment remained averse to risk over fears US lawmakers might not reach a deal in time to avoid tax hikes and spending cuts in the new year. The benchmark S&P/ASX 200 index was up 16.3 points at 4,634.1 to reach a fresh 17-month high. It climbed 0.5 percent on Wednesday to hit its highest closing level since July 8, 2011.

Defensive stocks were strong, with telecommunications giant Telstra rising 0.2 percent, blood products maker CSL Ltd up 1 percent and supermarket giant Wesfarmer jumping 1.3 percent. Banking stocks were also strong, with Westpac Banking Corp leading gains, up 0.7 percent. Miners were weak. BHP Billiton Ltd traded flat, while rival Rio Tinto dropped 0.6 percent. New Zealand's benchmark NZX 50 index jumped 1.3 percent to 4,075.5 points.

Copyright Reuters, 2012