The local bourse has finished higher after the lower house of the US Congress overwhelmingly passed a crucial compromise measure to avert a looming US default.
The benchmark S&P/ASX200 index began Thursday in negative territory but closed up 19.5 points, or 0.27 per cent, to 7,110.8.
The All Ordinaries gained 17.2 points, or 0.24 per cent, to 7,290.7.
The bill to suspend the debt ceiling for two years was passed by the US House of Representatives in a 314-117 vote.
The measure now heads to the Senate, where lawmakers will need to pass it before the US hits its $US31.4 trillion ($A48 trillion) borrowing cap on Monday, leaving the world's most powerful country unable to make payments on its bills or bonds.
"Finally a deal. After days of posturing, it appears the White House and the House of Representatives have reached a deal," State Street Global Advisors Australia equity investment strategist Julia Lee told AAP.
"With concerns about the debt ceiling now in the rear window, investors look to refocus on the economy and signs that the US is heading into a recession."
Ms Lee said the market was also helped by better-than-expected data out of China.
"The Caixin manufacturing data showed an expansion in activity. The consensus had been for a small contraction in activity," she said.
Eight of the ASX's 11 sectors finished higher, with industrials and utilities slightly lower and financials flat.
Health care was the biggest gainer, climbing 1.2 per cent as CSL added 1.3 per cent to $310.29.
Tech rose 1.1 per cent, despite the AI-fuelled tech rally showing signs of losing steam on Wall Street, with the Nasdaq overnight dropping for the first time in six days.
AI dataset company Appen rose 3.5 per cent to a six-month high of $3.27, having climbed by a third so far this week.
Xero gained 1.9 per cent, Altium added 2.4 per cent and Wisetech Global grew 0.9 per cent.
The heavyweight mining sector edged 0.1 per cent higher, with BHP also up 0.1 per cent, to $42.07. Fortescue climbed 0.8 per cent to $19.37 and Rio Tinto added 0.4 per cent to $107.42.
Goldminers and lithium miners went in opposite directions - the former up and the latter down.
Northern Star rose 3.1 per cent and Newcrest climbed 2.4 per cent as the price of the yellow metal rose overnight, while Pilbara dipped 1.6 per cent and Liontown dropped 1.1 per cent.
The Big Four banks were mixed, with ANZ down 0.8 per cent to $22.73, Westpac down 0.4 per cent to $20.60, CBA flat at $96.80 and NAB up 0.3 per cent to $26.04..
In the energy sector, Paladin rebounded 11.0 per cent to 60.5c, a day after the emerging uranium miner denied that the Namibian government was set to partially nationalise its mine and all the others in the southwest African country.
In consumer staples, Lynch Group gained 16.1 per cent to $2.20 after the potted plant and flower wholesaler forecast full-year operating earnings of $43m, $3m above the top-end of previous guidance.
Consumer demand for floral products remains strong, the cost of international freight is moderating and labour availability has improved, reducing the requirement for overtime outside high-volume events.
In small caps, AML3D rose 6.5 per cent to 6.6c after the 3D metal printing company said it had multiple negotiations under way for US Defence contracts.
The Australian dollar was buying 64.92 US cents, from 64.81 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday up 19.5 points, or 0.27 per cent, at 7,110.8.
* The broader All Ordinaries gained 17.2 points, or 0.24 per cent, to 7,290.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.92 US cents, from 64.81 US cents at Thursday's ASX close
* 90.75 Japanese yen, from 90.47 Japanese yen
* 60.81 Euro cents, from 60.71 Euro cents
* 52.25 British pence, from 52.41 British pence
* 108.25 NZ cents, from 107.92 NZ cents
