Asian markets licked their wounds on Tuesday after the previous day's sell-off on hopes that Cyprus's upcoming vote on the bank deposit levy will pass through parliament and secure the island's financial rescue.
The Nikkei 225 closed up 2 percent to out perform the region, Seoul's Kospi rose modestly above a one-month low and the Hang Seng Index crossed the 22,000-mark to rebound from Monday's three-month low. Meanwhile, Shanghai shares recouped losses after touching an all-time low for 2013 but the Australian market closed at a near one-month low.
Richard Martin, managing director at IMA Asia told CNBC's "Capital Connection" that developments in Cyprus will increase capital flows into Asia as the region is one of the few strong growth plays for investors. "The sum total may be that this (Cyprus) does push more money in Asia's direction," he said.
Cyprus's shock bank levy announcement did not have as deep of an impact on global markets as initially feared. The S&P 500 index only pulled back half of a percent overnight and the uptick in Spanish and Italian yields was relatively contained, which helped pave the way for a rebound across risk assets in Asia.