Asian stocks rose on Tuesday to extend gains from the previous session after Wall Street's main benchmark indexes hit record highs overnight on signs of progress in U.S.-China trade talks.
Markets in China and Hong Kong traded cautiously after China's central bank said that Beijing needs to resolve outstanding financial risks, and must counter risks from "abnormal" market fluctuations stemming from external shocks.
Safe-haven assets such as the Japanese yen, the Swiss franc and gold eased after China said it would crack down on IP theft in an attempt to nudge trade talks toward a positive direction.
Oil prices held steady after closing higher on Monday in reaction to positive comments from the United States and China on the trade front. The British pound remained supported amid hopes of an end to a hung parliament.
China's Shanghai Composite index and Hong Kong's Hang Seng index gave up early gains to turn lower. Chinese online retail giant Alibaba surged nearly 7 percent on its debut.
Japan's Nikkei index was up 0.6 percent as the dollar hit a one-week high against the yen on growing optimism that China and the United States will soon announce a partial trade agreement.
Hitachi shares rallied 2.3 percent on a Nikkei report that the company is nearing a deal to sell its 51 percent stake in its chemical unit to Showa Denko in a deal worth about 950 billion yen (£6.82 billion).
Australia's benchmark S&P/ASX 200 surged 0.7 percent as Westpac Banking Corp snapped four sessions of declines and rising oil prices helped lift energy stocks. Bank of Queensland plunged 6 percent after announcing a A$250 million discounted placement.
South Korea's Kospi average rose 0.4 percent and New Zealand's benchmark S&P/NZX-50 index was up 0.6 percent.
U.S. stocks hit record highs overnight as traders cheered news on the merger and acquisition front as well as reports suggesting that China and the United States were 'very close' to a phase one trade deal.
The Dow Jones Industrial Average rose 0.7 percent, the tech-heavy Nasdaq Composite surged 1.3 percent and the S&P 500 added 0.8 percent.
European markets advanced on Monday after U.S. national security adviser Robert O'Brien said an initial U.S.-China trade deal was still possible by the end of the year.
The pan European Stoxx 600 jumped 1 percent. The German DAX gained 0.6 percent, France's CAC 40 index rose half a percent and the U.K.'s FTSE 100 climbed 1 percent.