The S&P/ASX200 was trading up 0.40% at 7,266.00 by midday.
US stocks turned higher after Speaker Kevin McCarthy told reporters the House of Representatives could vote on a debt ceiling deal as soon as next week.
The S&P 500 closed up 0.9%, the Dow Jones Industrial Average gained 0.3% and the Nasdaq jumped 1.5%.
President Biden said Wednesday that he was confident a default would be avoided. Investors have been seeking more confirmation that talks are progressing.
Meanwhile, lower-than-expected jobless claims showed a still-hot labor market, sparking fears the Federal Reserve has more work to do to fight inflation.
In commodity markets, Brent crude oil fell 1.3% to US$75.95 a barrel while gold dropped 1.2% to US$1,957.54.
Australian government bonds gained, with the 2 Year yield rising to 3.39% and the 10 Year yield climbing to 3.48%. US Treasury notes also increased, with the 2 Year yield rising to 4.25% and the 10 Year yield climbing to 3.65%.
The Australian dollar slid to 66.19 US cents from its previous close of 66.57. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, increased to 97.38.
Asia
Chinese shares ended broadly higher amid divergent expectations for policy easing. Recent domestic economic data suggested that China’s economic recovery may be losing steam. Consumption and property stocks weighed on the market with pork producer Muyuan Foodstuff falling 6.1% and China Vanke declining 1.1%. Software and telecom stocks gained. Beijing Kingsoft Office Software rose 8.0% and China Mobile added 1.4%. The Shanghai Composite Index ended 0.4% higher at 3297.32. The Shenzhen Composite Index rose 0.1% and the ChiNext Price Index closed 0.7% lower.
Hong Kong shares ended higher on the back of hopes for a US federal debt deal. The benchmark Hang Seng Index closed 0.9% higher at 19727.25. Most shares rose, with tech companies and insurers leading gains. The Hang Seng Tech Index advanced 1.2% to 3917.09, with Alibaba Group Holdings increasing 2.7% and Baidu rising 1.5%. China Life Insurance rose 3.6% and Ping An Insurance increased 2.2%. Hua Hong Semiconductor gained 7.2% after it received the Shanghai Stock Exchange's approval for its listing. Developers were among losers. Longfor Group dropped 4.0% and Agile Group Holdings fell 3.7%.
Japanese stocks ended higher, led by gains in electronics shares, as optimism has grown for US debt-ceiling negotiations. Advantest rose 8.0% and Renesas Electronics climbed 5.0%. Sony Group gained 6.4% following news that it is considering listing its financial unit. The Nikkei Stock Average rose 1.6% to 30573.93.
Indian shares ended lower as the market continued to pull back after hitting a multi-month high earlier in the week. The benchmark Sensex fell 0.2% to settle at 61431.74. A mixed bag of companies weighed on the market. State Bank of India dropped 2.1%, conglomerate ITC fell 1.9% and accessories maker Titan Co. declined 1.5%. Automakers' recent weakness persisted, with Mahindra & Mahindra and Tata Motors losing 1.4% each.
Europe
European stocks rose as optimism over a deal to resolve the US debt ceiling impasse boosted market sentiment. The pan-European Stoxx Europe 600 gained 0.4%, the German DAX jumped 1.3% and the French CAC 40 added 0.6%.
US House Speaker Kevin McCarthy said he could "see the path" to reaching a deal to raise or suspend the debt ceiling in time for a House vote next week. "On that basis, confidence is growing that the melodrama playing out in Washington DC is merely a piece of political theatre, and that a deal will happen eventually, as it has on so many previous occasions," CMC Markets analyst Michael Hewson wrote.
In London, the FTSE 100 closed up 0.3% to 7742 points. Amid the top performers, JD Sports shares bounced to the top of the table, closing up 5.9%, followed by ConvaTec, up 5%. Burberry and BT shares underperformed after reporting full-year performances, down 5.2% and 5%, respectively.
North America
US stocks turned higher after Speaker Kevin McCarthy told reporters the House of Representatives could vote on a debt ceiling deal as soon as next week.
The S&P 500 closed up 0.9%, the Dow Jones Industrial Average gained 0.3% and the Nasdaq Composite jumped 1.5%.
President Biden said Wednesday that he was confident a default would be avoided. Investors have been seeking more confirmation that talks are progressing.
Meanwhile, lower-than-expected jobless claims showed a still-hot labor market, sparking fears the Federal Reserve has more work to do to fight inflation.
Among individual stocks, Walmart rose. The biggest US retailer climbed after reporting earnings that beat Wall Street's estimates on revenues and profit. Walmart also raised its full-year outlook.
Target, another US retail giant, tumbled 4%, one of the S&P 500's worst performers.
Apple shares hit a one-year high. The iPhone maker rallied to what would be its highest closing level since April 2022. Apple, the largest component of the S&P 500, has boosted the index so far this year.
