Shares soar amid positive news on standoff LOCAL shares rose their most since July as US President Barack Obama and House Republicans discussed a proposal to extend the US debt limit for six weeks. The benchmark S&P/ASX 200 closed up 1.6 per cent at 5234.1 - its biggest one-day rise since July 2 after hitting a six-day high of 5239.6 earlier today. The index rose 0.4 per cent for the week. Fear of a US debt crisis and a subsequent slowing of the international economy had pushed the Australian sharemarket down as much as 3.7 per cent in the past two weeks. That followed a 1.6 per cent rise to a five-year high of 5314.3 last month after the U. Federal Reserve kept bond buying unchanged and the conservative Liberal-National coalition won the Australian election. "There are still a lot of issues to be resolved" in passing a US budget and lifting the debt ceiling, CIMB head of sales trading Justin Gallagher said. So there is a question mark about the sustainability of this rally in the short term. Worldwide equity markets will remain supported on dips because of widespread expectations the fiscal impasse would be resolved, Mr Gallagher said. Australian shares may outperform before the end of the year as the "honeymoon period" for the conservative coalition government continues, Mr Gallagher added. "Business confidence has been very positive and we've obviously seen very strong gains in domestic housing prices and clearance rates - so that's good for the consumer balance sheet, spending and confidence across all measures of the economy," he said. Most expect the Christmas period will be relatively positive and it's hard to see what will derail that positivity before year end. Westpac lead banks with a 2.5 per cent rise while Brambles rose 1.9 per cent and Qantas added 4.6 per cent. Westpac will pay $1.45 billion for the Australian assets of Lloyds bank adding about $130 million to cash earnings by fiscal 2015, according to a Westpac presentation. BHP Billiton, Rio Tinto and Fortescue climbed 1.5 per cent - 2.5 per cent, after spot iron ore climbed 0.9 per cent to $US133 a tonne yesterday. Commonwealth Property Office Fund rose 3 per cent to $1.19 after a consortium comprising Canada Pension Plan Investment Board, one of Canada's biggest pension-fund managers, and Dexus Property Group made a nonbinding bid for CPA, valuing the owner of Australian office buildings at $2.7 billion. The consortium's offer comprises 68c cash and 0.4516 Dexus stapled securities equating to $1.15 per CPA share based on Dexus's closing price on Thursday of $1.04 a share. It represents a 0.5 per cent discount to CPA's closing price on Thursday of $1.155. Dexus rose 1.9 per cent to $1.06 a share. Mesoblast rose 4.7 per cent after the biological-therapies developer bought Osiris's cultured stem-cell business unit for $20 million. Traders were waiting for China international trade, new lending and money supply data due over the weekend.