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Asian stocks rally as Greece worries fade; China bucks trend

Asian shares hit fresh highs on Tuesday, as investors deemed a Greek exit from the euro zone unlikely despite an election victory by anti-austerity party Syriza in Sunday's snap election. Chinese equities bucked the rising trend as new data served up fresh concerns about the impact of a cooling economy.

"I think a 'Grexit' isn't wanted by people in Greece and I don't think the country [under a new government] will storm out of the euro zone because the consequences will be a systemic crisis for the Greeks, but not so for the rest of Europe," Geoff Lewis, global market strategist at J.P. Morgan Asset Management, told CNBC Asia's "Squawk Box."

A modestly higher finish by U.S. stocks overnight also helped sentiment. The Nasdaq Composite and S&P 500 added 0.3 percent each, while the Dow Jones Industrial Average finished little changed, as investors mulled results from Greek elections and a massive blizzard bearing down on the East Coast.

Meanwhile, the Federal Reserve kicks off its monthly policy meeting later on Tuesday.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Mainland indices down

China's benchmark Shanghai Composite index trimmed losses to 0.9 percent in a broad-based slump, following government data that showed an 8 percent slump in industrial profits from a year earlier.

Property heavyweights were among the biggest losers for the day, with China Merchants Property and Poly Real Estate plunging 5.2 and 4.7 percent each. Vanke, Gemdale and Shanghai Shimao made losses between 3 and 4.1 percent.

Apart from insurers like China Pacific Insurance and Ping An Insurance which retreated 1.7 and 2.2.percent each, Bank of China and Bank of Communication closed down more than 3 percent.

In Hong Kong, the Hang Seng index took cues from Shanghai to close down 0.4 percent late Tuesday.

Read MoreECB QE puts Nikkei rally back on

Nikkei rallies 1.7%

Japan's key Nikkei 225 index hit a four-week high, supported by a softer yen trading above the 118 handle against the U.S. dollar.

Among blue-chip majors, Canon and Mitsubishi Electric tacked on nearly 2 percent each, while Toyota Motor, which is in the news for planning a switch to a merit-based pay for its factory workers, climbed 1.3 percent.

Shares of the country's second largest bank by market capital Sumitomo Mitsui Financial Group was up 2 percent ahead of third quarter earnings data. Insurer Tokio Marine Holdings also finished 3 percent higher.

ASX adds 0.8%

Australia's benchmark S&P ASX 200 index closed up at a more than two-month high following an extended weekend, while the Australian dollar bounced off Monday's six-year low to trade at $0.7931 to the dollar.

"The ASX 200 squeezed through 5,500 and momentum picked up from there, with traders pushing it towards November 2014's highs in the 5,550 region. This could act as resistance in the near term," said Stan Shamu, IG's market strategist.

The big four lenders led advances, as investors turned to equities that will ride out ongoing volatility, noted IG's market strategist Evan Lucas. Commonwealth Bank of Australia notched up 1.6 percent, while National Australia Bank, ANZ Banking and Westpac made gains between 0.7 to 1.2 percent.

However, weakness in iron ore prices weighed on mining shares, capping gains on the bourse. Fortescue Metal halved losses to close down 2.4 percent, while BHP BIlliton and Rio Tinto fell 1.5 and 0.1 percent, respectively.

Read MoreAustralian dollar faces test of key support

Kospi rises 0.9%

South Korean shares settled at a one-month high as energy-related counters enjoyed a rare reprieve on the back of bargain hunting. LG Chem and S-Oil jumped 6.4 and 5.8 percent each, while SK Innovation surged 4.3 percent. Utility Kepco and Korea Gas also rallied 4.3 and 1 percent, respectively.

Samsung SDI closed up 0.8 percent despite fourth-quarter earnings missing market expectations. But Kia Motors tanked for the fifth consecutive session, down 2.3 percent on Tuesday, on concerns about the automaker's earnings outlook.