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Asian equities hit new highs, but Hong Kong lags

Asian indices outside Hong Kong advanced on Tuesday to hit new highs, but traders treaded cautiously ahead of Federal Reserve Chair Janet Yellen's two-day testimony before Congress, which could give clues on the possible timeline of a rate hike in the U.S.

Meanwhile, markets kept an eye on developments in Greece's bailout extension as Athens delayed the submission of its economic reform proposals until Tuesday.

Overnight, U.S. stocks pulled back from Friday's records to close narrowly mixed on the back of weakness in oil prices. The Dow Jones Industrial Average and the S&P 500 settled slightly below the flatline, while the tech-heavy Nasdaq closed up 0.1 percent as Apple closed at another all-time high.

China markets remained shut for the Chinese New Year holiday and will reopen tomorrow.

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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Sydney gains 0.3%

Australia's S&P ASX 200 index recouped losses to close near a seven-year high, supported by a surprisingly resilient energy sector and as the banking sector mostly recovered from an earlier selloff.

The big four lenders erased earlier losses, with Australia and New Zealand Banking, Commonwealth Bank of Australia and Westpac making gains of 0.7 percent each. A more than $1 drop in oil prices overnight failed to dent sentiment; Woodside Petroleum made gains of nearly 1 percent, while Oil Search ticked up 0.1 percent following a surge in profit results.

Focus was on BHP Billiton, which posted a 31 percent drop in half-year profit amid a collapse in oil and iron ore prices, but the global miner managed to beat market forecasts. Hence, BHP shares closed up 2.9 percent.

Meanwhile, QBE Insurance Group - the country's largest insurer by premium income - pared losses to notch up 7.2 percent despite the release of a lower-than-expected full-year net profit. Travel retailer Flight Centre soared 12.1 percent as it reaffirmed it would achieve its 2014/15 profit guidance.

Nikkei adds 0.7%

Japan's Nikkei 225 index touched a fresh 15-year high of 18,603 for the fourth consecutive session, recouping morning losses as the yen weakened to 119.11.

Honda settled 0.2 percent lower amid choppy trade as markets digested news of its leadership shakeup. After being at the helm for the last six years, CEO Takanobu Ito will step down in June and will be replaced by 55-year-old engineer Takahiro Hachigo. Other Japanese automakers like Nissan and Suzuki Motor also lost 0.1 and 0.4 percent, respectively.

Among other exporters, electronic players such as Nintendo and Panasonic pared losses in the last hour of trading and finished modestly higher. Daiwa House Industry bounced 1.1 percent after the Nikkei business daily reported that it could post an operating profit of about 200 billion yen for the year ending March 2016.

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Kospi up 0.4%

South Korea's Kospi index finished just shy of a two-and-a-half-month intra-day high, helped by a robust performance among tech shares.

SK Hynix piled on nearly 1 percent, while Samsung Electronics' affiliate Samsung SDI rocketed nearly 4 percent on news that it is acquiring the battery pack business of Austria-based automobile manufacturer Magna Steyr.

Shinhan Financial, the biggest financial group in Korea, climbed 1.3 percent ahead of the selection of the new CEO of Shinhan Bank.

Read MoreFears aside, one Asia market may still have legs

Rest of Asia mixed

Hong Kong's Hang Seng index underperformed the region for the second straight session, down 0.4 percent amid a pullback among lenders. Standard Chartered was the biggest loser, receding 4.4 percent, but the spotlight was on HSBC, which slumped 3.4 percent after a worse-than-expected drop in full-year profit.

Taiwanese stocks charged up 1 percent to their highest level since November 2007, with tech shares leading the rally. Apple suppliers rode on the momentum of the iPhone maker, with Pegatron rising 2.5 percent, and Quanta, Wistron and Catcher making nearly 1 percent gains. Taiwan's key Taiex index resumed trade on Tuesday after being shuttered for the Lunar New Year holiday since February 16.