UPDATE 8am: Australian stocks have followed global markets higher on optimism US politicians are moving towards a deal to prevent the country hitting its debt ceiling.
At 8am, the benchmark S&P/ASX200 index was 74.8 points, or 1.5 per cent, higher at 5221.9 points while the broader All Ordinaries index had gained 73.5 points or 1.4 per cent, at 5219.7 points.
The local market has opened more than one per cent higher after spending most of the past two weeks in the red.
Senior Republicans met with US President Barack Obama early on Friday (Australian time) with an offer to temporarily extend the debt ceiling to prevent a situation where the country has to default.
ComSec chief economist Craig James said traders had reacted positively to the development, although no deal has been reached as yet.
“Optimism is certainly taking over on the expectation that we could get the budget and debt impasse resolved at some point in the US,” he said.
Republicans and Democrats have been locked in a bitter dispute with budget negotiations ending in stalemate with the GOP demanding changes to Obama's healthcare program.
Congress' failure to approve a budget has seen the federal government go into partial shutdown since the start of October.
Mr James said gains were widespread across the Australian market on Friday morning, but had yet reached the level seen in the US, where bourses were up more than two per cent.
“Our gains are a little bit retained compared to the US or Europe, but that's to be expected given we didn't fall as much compared to them in the past week or so,” he said.
Among the big miners, BHP Billiton was 42 cents higher at $35.04, Rio Tinto had gained $1.05 to $61.26 while Fortescue Metals had lifted eight cents to $4.96.
The major banks were all sharply higher, with ANZ up 56 cents to $31.11, National Australia Bank lifting 61 cents to $34.78, Commonwealth Bank gaining $1.04 cents to $71.84 and Westpac adding 62 cents at $32.82.Telstra was 4 cents higher at $4.96.