Asian markets have risen on hopes the US will reach a deal on raising its debt ceiling, tracking overnight gains on Wall Street.

This was after Republicans from House of Representatives offered President Barack Obama a short-term increase in the debt limit to stave off default.

Stock indexes in Japan, Australia, China and Hong Kong all gained.

There have been concerns that a failure to agree a deal to raise the limit may see the US default on its payments and hurt the global economy.

Analysts said the offer by the Republicans had raised hopes that such a scenario was likely to be avoided.

Asian markets have risen on hopes the US will reach a deal on raising its debt ceiling, tracking overnight gains on Wall Street

“What this is, is opening the door to discussion and negotiation when before we had two sides just finger pointing,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC.

“We don’t know if in six weeks we’ll be in the same place, but at least this opens the possibility [of a deal]”, he said.

Japan’s Nikkei 225 index rose 1.5%, Hong Kong’s Hang Seng gained 1.3%, Australia’s ASX 200 added 1.6% and South Korea’s Kospi was up 1.2%.

On Thursday, the US markets had their best day since January 2013, buoyed by the proposal. The Dow Jones, S&P 500, and Nasdaq indexes all closed up by more than 2%.

The US needs to agree on raising the nation’s $16.69 trillion debt ceiling by October 17.

A failure to do so could see the US government default, as it runs out of money to pay its bills and service its national debt.

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