Optimism that US lawmakers will eventually pass a new stimulus package lifted Asian markets Monday, with the White House ramping up its offer and Donald Trump insisting Republicans want to get a deal done.

The gains followed another strong lead from Wall Street, with hopes for a fresh injection of cash into the world's top economy overshadowing a surge in virus infections that have forced some governments to reimpose containment measures and targeted lockdowns.

Investors were sent on a roller-coaster ride last week when the president called off talks before doing a volte-face to say they were back on and saying they were progressing well. On Friday, he jacked up his offer, proposing a $1.8 trillion package and even saying he favoured an even larger package.

The move has instilled optimism that an agreement can be reached, even though the White House plan is $400 billion short of the one put forward by the Democrats.

With Joe Biden well ahead in opinion polls, analysts say traders are increasingly betting he will win next month's election comfortably -- avoiding the uncertainty of a Trump challenge to the result -- and Democrats will take both houses of Congress. That expectation continues to support equities, even while the talks remain jammed up with Senate Majority Leader Mitch McConnell saying there was not enough time to complete the talks before the vote, while Democrat House Leader Nancy Pelosi said they were at an impasse.

"Markets that once feared a Democratic sweep now appear to be hoping that the Democrats do take control of the Senate, with the polling leads for Biden boosting optimism for greater stimulus," said Ben Emons, a strategist at Medley Global Advisors.

Fresh wave of infections

Hong Kong and Shanghai led Asian markets higher, both piling on more than one percent, while Sydney, Seoul, Singapore, Jakarta and Wellington also enjoyed healthy gains.

But Axi strategist Stephen Innes said with traders now pricing in a Biden win, a recovery for Trump in polls could "raise his prospects of re-election and another split Congress, which would undermine stimulus expectations".

He added, however, that "the walk back approach on foreign policy was fine in the midst of the US-China trade war. Still, stimulus flip flops at this time of the election race point to a White House in disarray and can't be good for picking up undecided voters".

Hopes for a new deal are overshadowing worries about a fresh wave of infections, particularly in Europe, with British Prime Minister Boris Johnson set to unveil a new alert system that could see some cities put back into lockdown.

Meanwhile, Berlin bars and restaurants were ordered to shut early under a partial curfew announced until October 31, while spiralling cases in France have led to fears that the government may need to impose local shutdowns in major cities, following similar moves in the Spanish capital.

The yuan edged down after Chinese officials unveiled measures that make it easier for investors to bet against the unit, which has rallied in recent days to highs not seen since April last year. The gains were fuelled by an economic recovery in China and more attractive interest rates compared with the US.