Equities in Shanghai and Tokyo were the star performers in Asia on Tuesday, drawing support from the new records on the Dow Jones Industrial Average and S&P 500 overnight, as well as a flurry of economic reform news out of Beijing.
However, risks of a Greek default remained on the radar of investors after Athens said on Monday it needed a debt deal by the end of the month or it could default.
"That is something to be worried about. If Greece does default and exit the euro zone, that is clearly going to rattle the markets," OCBC Group Wealth Management's vice president Vasu Menon told CNBC's "The Rundown" on Tuesday. "But with Greece being just 2 percent of the euro zone economy and exposure of European banks to Greek government debt being minimal, I think [the impact from] Greece is going to be ring fenced."
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Overnight, the blue-chip Dow set a record for the fifth time in 2015, closing above its previous closing and intra-day high of 18,288.63. The S&P 500 closed at a record for the third day in a row, its ninth for the year. Helped by a rally in Apple, the Nasdaq Composite ended up 0.6 percent.
Analysts cited expectations the Federal Reserve would delay increasing interest rates after comments from Chicago Fed President Charles Evans suggested the central bank may stay on hold until next year.
Mainland markets up
China's benchmark Shanghai Composite index bounced off Monday's one-week lows to scale up 3.15 percent, thanks to news that Beijing plans to gradually ease controls over deposit rates, improve the initial public offering (IPO) system and develop its capital market. Also boosting sentiment was a document issued by the State Council on Monday about steps to experiment a Shenzhen-Hong Kong stock connect.
Securities plays got a fillip; Huatai Securities, which has been in the spotlight for seeking a Hong Kong listing, and Haitong Securities jumped 10 and 7.55 percent, respectively. Blue-chip developers Poly Real Estate and China Vanke also attracted hefty buy orders, up 3.8 and 2.31 percent, respectively.
China Railway Group and China Railway Construction also climbed 2.6 and 3.42 percent, respectively, after Beijing approved $40 billion of rail and subway projects in a bid to bolster the economy.
In Hong Kong, shares tracked their mainland peers to close up 0.4 percent. The top gainer was Greentown China Holdings, which rose 6.03 percent, after it said that state-owned China Communications Construction Group has agreed to raise its interest in the company to become its largest shareholder.
"You have a variety of factors helping H-shares and A-shares. Firstly, you have a lot of liquidity, whether it's investments or easing of monetary policy - the latter will likely get more robust in order to accelerate the economy. Secondly, unless the government is prepared to allow housing prices to accelerate, I think equities is the least systemic asset class that will be allowed to continue appreciating," said Viktor Shvets, head of Strategy Research, Asia at Macquarie.
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Nikkei gains 0.7%
Japan's benchmark Nikkei 225 index recovered the 20,000 mark in morning trade and held on to a three-week high all day, but gains were capped as investors looked ahead to the release of first-quarter gross domestic product (GDP) on Wednesday.
Gainers were led by brokerage houses and airlines; Nomura Holdings leaped 2.1 percent, while Japan Airlines advanced 1.4 percent.
Share prices of Stanley Electric elevated nearly 3 percent as investors cheered its decision for a share buyback.
ASX loses 0.7%
Australia's S&P ASX 200 index nursed losses amid a broad-based selloff.
Resources plays were hit despite firmer gold and oil prices in Asian trade; Woodside Petroleum and Santos eased 0.6 and 1.3 percent, respectively, while Newcrest Mining and Evolution Mining sagged more than 1 percent each.
Iron ore miners were battered as prices of the steel-making raw material fell below $60 a tonne. Market bellwether BHP Billiton receded 1.8 percent, extending a 7 percent slump from the previous session, while Fortescue Metals slumped 3.02 percent.
By contrast, South32 rallied 12.2 percent after a lackluster debut on Monday.
Meanwhile, the Reserve Bank of Australia's (RBA) May meeting minutes showed that the central bank left open the possibility it might cut interest rates further, leading the Australian dollar down to a one-week intra-day low of 0.7954 before rebounding back to 0.7995 against the greenback.
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Kospi adds 0.5%
After relatively muted moves in the early hours of trading, South Korea's Kospi index edged up on the back of a 1.7 percent rise in its top weighted stock Samsung Electronics.
Shares got a boost as a Federal appeals court upheld most of Apple's patent victory against the South Korean tech giant, but overturned part of the decision and said a lower court should reduce the total amount that Samsung would have to pay.
However, steep losses in the shares of recent top performers such as AmorePacific and Shinsegae limited the bourse's advances. The cosmetics maker and the department store giant moved down 1.6 and 2.1 percent, respectively.
Jakarta Comp adds 0.6%
Indonesian shares reversed direction to trade in the black after Bank Indonesia held interest rates unchanged at 7.50 percent. Meanwhile the rupiah lost 0.14 percent of its value against the U.S. dollar, with the greenback fetching 13,150 rupiah.