Stock market today: Asian stocks follow Wall St higher on hopes for U.S. debt deal

Asian stock markets followed Wall Street higher on Thursday on hopes U.S. political leaders can reach agreement to avoid a potentially disastrous default on government debt.

Asian stock markets followed Wall Street higher on Thursday on hopes U.S. political leaders can reach agreement to avoid a potentially disastrous default on government debt.

Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices edged lower.

Wall Street rallied Wednesday after U.S. President Joe Biden expressed confidence "America will not default" despite lack of agreement on Republican demands for cuts in aid to poor families to pay for food, medical care and rent in exchange for raising the amount the government can borrow.

"Markets are now fully pricing an in-time resolution of the crisis," said Clifford Bennett of ACY Securities in a report. "No one wants to sell ahead of an announcement of a deal being made."

Speaker Kevin McCarthy of the House of Representatives said Tuesday the two sides were far apart but could reach a deal by the end of the week. The U.S. government will run out of cash if they don't agree by June 1 to increase its borrowing limit.

Any disruption in U.S. government borrowing and debt payments could send shockwaves through the global financial system. Treasury debt is regarded as the world's safest asset and influences the price of private sector borrowing.

The Shanghai Composite Index gained 0.8% to 3,311.09 and the Nikkei 225 in Tokyo advanced 1.6% to 30,562.40. The Hang Seng in Hong Kong rose 1% to 19,746.90.