Asian shares ended broadly higher on Tuesday, thanks to firmer cues from Wall Street and Europe overnight on growing hopes that European leaders may agree on new measures to address the region's debt crisis.
Investors anticipate that the May 23 EU leaders' summit will see proposals to tackle the region's worsening debt crisis after France's new finance minister and his German counterpart vowed their support for Greece to stay in the 17-nation euro and the monetary union.
In China, a government funded publication said the government will fast-track its approval of infrastructure investments to support growth, underlining a call by Premier Wen Jiabao over the weekend for greater efforts to support a transition in the world's second-largest economy.
Optimism that China and Europe will do more to support economic growth boosted Japanese shares, with the Nikkei average climbing 1.1 percent despite caution ahead of the Bank of Japan's policy-setting meeting through Wednesday. China-related stocks led the gainers, with Fanuc and Komatsu climbing 4-5 percent on speculation Beijing will announce new measures to boost economic growth.
Renesas Electronics soared 7.4 percent following reports that the chipmaker is considering restructuring measures, with plans to cut around 6,000 jobs. Exporters like Kyocera and Nikon rose about 2 percent each, as a pause in the yen's rise against the greenback and the euro alleviated concern over their earnings.
Nissan Motor climbed 4.4 percent following an announcement Monday that it seeks to expand its presence in the fast-growing Russian market. Other automakers also rebounded from recent losses, with Honda Motor gaining 1.7 percent and Toyota Motor climbing 2.5 percent.
China's Shanghai Composite index rose 1.1 percent, with cement stocks pacing the gainers in thin trading, helped by Premier Wen Jiabao's pro-growth policy comments over the weekend. Hong Kong's Hang Seng index added 0.6 percent.
Australian stocks followed Wall Street higher as pressure mounted on German Chancellor Angela Merkel to drop her opposition to bank recapitalization and commonly backed eurozone bonds. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended a choppy session up about 1.2 percent each.
Miners gained ground after China, Australia's largest trading partner, said it will accelerate investment in infrastructure projects to combat slowing growth. BHP Billiton rose 0.7 percent, rival Rio Tinto gained 1.7 percent and Fortescue ended up 1.5 percent.
Financials also closed on a firm note, with the big four banks adding between half a percent and 1.3 percent. Qantas advanced 2.8 percent after the airline announced a surprise corporate restructuring and management shuffle that will split its loss-making international operations from its profitable domestic business. Shares of building products maker Boral closed up 1.4 percent after the company's chief executive, Mark Selway, stepped down from the position with immediate effect.
South Korea's Kospi average rallied 1.6 percent, mainly driven by bargain hunting in battered technology stocks following steep declines last week. LG Electronics soared 7.6 percent to snap a five-day losing streak, while Samsung Electronics jumped 2.6 percent and LG Display added 1.7 percent.
New Zealand shares rose, lifting the benchmark NZX-50 index up a percent from a five-week low, after the German and French finance chiefs vowed to take all necessary steps to keep Greece in the euro currency bloc. Telecom, which has a high dividend yield of over 11 percent, jumped 3.5 percent, while Fletcher Building gained 1.8 percent and Chorus, the network company spun off from Telecom last November, added 1.6 percent. Skellerup,Freightways and NZ Refining all closed up about 4 percent higher.
Rural services firm PGG Wrightson ended unchanged after dairy exporter Fonterra Cooperative Group cut its forecast milk payout this season. Sanford, the fishing company, shed 1.2 percent after the government announced that foreign charter fishing vessels operating in New Zealand waters will have until May 2016 to comply with a new policy announced in response to the mistreatment and underpayment of crews working on some boats.
India's benchmark Sensex was last trading down a percent, as the retreat in the rupee despite RBI's latest measures to curb speculation in the currency futures market sparked fears of capital outflows.
Elsewhere, Indonesia's Jakarta Composite was up over 2 percent, Malaysia's KLSE Composite gained half a percent, Singapore's Straits Times index was up 1.2 percent and the Taiwan Weighted average advanced 1.2 percent.
U.S. stocks posted strong gains overnight benefiting from bargain hunting following recent selling, which dragged the major averages down to four-month closing lows on Friday. The Dow rose 1.1 percent, the tech-heavy Nasdaq jumped 2.5 percent and the S&P 500 gained 1.6 percent.
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