MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.5 percent, ignoring modest overnight losses on Wall Street. Australian shares rose on growing expectations that the Reserve Bank of Australia will announce its second rate cut of 2015 when it meets on Tuesday, the first trading day after markets close for the Easter weekend. Debt markets imply a 77 percent chance of a quarter-point easing. Japan's Nikkei stock average was up 1.3 percent, after skidding to a three-week low in the previous session.
HONG KONG: Asian stocks posted their biggest rise in two weeks on Tuesday and the euro steadied as investors judged the selloff after Italy's referendum to be overdone, with robust US economic data also helping sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan bounced 0.7%, its biggest daily rise since Nov 22, breaking two days of falls. South Korea climbed 1.4% while Japan rose 0.4%.
European stocks are likely to open higher though gains may be subdued as US stock futures are in the red.
"Global risk sentiment roared back after falling prey to the initial (Italian Prime Minster) Renzi fallout and whatever negatives Italy creates for the eurozone, yesterday (Monday) was not the time for a euro implosion," said Stephen Innes, senior trader at online FX platform, OANDA.
Wall Street rose on Monday, with the Dow Jones industrials setting fresh record highs following a services sector report showing further strength in the economy.
Services sector activity hit a one-year high in November, with a surge in production boosting hiring, following on the heels of Friday's employment report that showed strong job gains last month.
The services news pushed short-dated Treasury yields higher with two-year benchmark yields stabilising near the 1.13% level, not far from a six-year high of 1.17% tested in late November.
Interest rates futures implied traders saw a 93% chance the Fed would raise rates by a quarter point to 0.50%-0.75% next week, CME Group's FedWatch showed.
Financial shares in China weakened after the country's insurance regulator suspended an unlisted insurer from selling some products. This followed the country's top market regulator's scathing comments over the weekend condemning "barbaric" share acquisitions by some unidentified asset managers.
With financials under pressure, both the blue-chip CSI300 index and the Shanghai Composite Index slipped, significantly underperforming regional markets.
In foreign exchange markets, the euro steadied after bouncing back from a near 21-month low set the previous day after Italian Prime Minister Matteo Renzi was defeated in a referendum on constitutional reform.
The euro eased 0.1% to US$1.0751 but held on to the bulk of the gains from Monday, when it ended up strengthening about 1% on the day, bouncing from a low of US$1.0505 set after Renzi said he would resign.
The dollar held near a three-week low against a basket of six major currencies as investors viewed recent strength as overdone.
The Australian dollar dipped after the Reserve Bank of Australia kept rates on hold at its monthly policy meeting but struck a cautious note on the economy's outlook. The Aussie was on the backfoot at US$0.7460.
"The statement highlighted a mixed economy with caution around labour, growth and inflation," said Su-Lin Ong, a senior economist at RBC Capital Markets.
Oil fell, with US crude down more than 1% at US$51.26 per barrel as investors judged that a 16% rally since the Opec agreement last Wednesday to curb production was getting stale. Brent crude also stumbled.
Still, higher stocks and firmer short-dated Treasury yields projected a more optimistic backdrop for risk appetite than Monday when Asian markets plunged as investors worried the eurozone may be heading for a fresh crisis after the Italian vote.
The lift in sentiment pushed the prices of relative safe-haven assets such as gold and Japanese yen lower. Spot gold fell by as much as 1.6% to its lowest since early February at US$1,157 an ounce, before bouncing somewhat. - Reuters
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