Asian stocks rose on Tuesday after no fresh escalation in tensions were reported from the Middle East. Also, the focus returned to an interim U.S.-China trade deal set to be signed on Jan. 15 at the White House.
Chinese shares hit eight-month highs on hopes of more policy support and amid no immediate escalation in tensions between Washington and Tehran.
The Shanghai Composite index rose 21.39 points, or 0.69 percent, to 3,104.80 while Hong Kong's Hang Seng index gained 0.34 percent to end at 28,322.06.
Japanese shares rebounded after having suffered steep losses in the previous session. The Nikkei average jumped 370.86 points, or 1.60 percent, to 23,575.72, with sentiment helped by an overnight recovery in U.S. shares on expectations that the situation in the Middle East will not escalate into full-fledged military action. The broader Topix index closed 1.62 percent higher at 1,725.05.
Fujifilm jumped 5.6 percent after announcing plans to end its Xerox sales partnership in 2021. Toyota Motor rallied 2 percent after the automotive giant announced it plans to create a "smart" city at the foot of Mount Fuji. Rival Honda Motor advanced 2.7 percent, Nissan Motor added 1.8 percent and Mazda Motor gained 2.3 percent.
Japan's service sector moved back into contraction at the end of the year, wiping out the minor recovery seen in November, survey data from IHS Markit showed today. The Jibun Bank services Purchasing Managers' Index fell to 49.4 in December from 50.3 in November.
Australian markets rallied as investors lapped up defensive stocks amid no fresh aggression in the Middle East. The benchmark S&P/ASX 200 index climbed 90.70 points, or 1.35 percent, to 6,826.40, while the broader All Ordinaries index ended up 86.20 points, or 1.26 percent, at 6,943.60.
Healthcare stocks gained ground, with heavyweight CSL rising 2.4 percent. The big four banks rose 1-2 percent while energy stocks Santos and Oil Search ended up more than 2 percent each.
Mining heavyweights BHP and Rio Tinto rose 0.4 percent and 0.6 percent, respectively. Gold miner Evolution Mining dropped 2.3 percent and Newcrest declined 2 percent.
Australia's job advertisements dropped 6.7 percent month-on-month in December, following a 1.8 percent decrease in November, data from ANZ showed today. This was the third consecutive fall and the biggest drop since May.
Seoul stocks rebounded and the Korean won rose sharply against the U.S. dollar as investors took a view that there will unlikely be additional armed clashes in the Middle East.
The benchmark Kospi jumped 20.47 points, or 0.95 percent, to 2,175.54. Pharmaceutical company Celltrion surged 2.9 percent and LG Household & Health Care soared 7.5 percent.
South Korea's current account surplus increased in November from last year, Bank of Korea reported today. The current account balance showed a surplus of $5.97 billion versus $7.83 billion in the previous month.
New Zealand shares ended little changed with a positive bias. India's Sensex was up 0.3 percent after losing nearly 2 percent the previous day.