Asian markets climbed on Wednesday, taking cues from a strong finish on Wall Street. Major indexes in Australia and Japan tacked on more than 2 percent, while South Korea finished nearly 1.9 percent higher.
Analysts believe the rally in U.S. and Europe overnight indicates markets are fully pricing in the expected Federal Reserve interest rate hike; the Fed's decision is due on Wednesday.
Evan Lucas, market strategist at spreadbetter IG, said, "bond and money markets capped off the night by completely pricing in the moves expected tonight by the Fed, settling themselves in-line with where the effective Fed funds rate will settle at 6am AEDT tomorrow."
He added, "short-dated T-Bills, the commercial papers complex, the government collateralized (GC) weekly repo rate and the one-week LIBOR rate have all moved in unison by rapidly shifting their respective rates higher."
In the commodities space, oil prices saw some rebound despite lingering concerns of oversupply in the market.
During Asian trade, West Texas Intermediate (WTI) futures fell by 37 cents, or 0.96 percent, to $36.99 a barrel, after rising 2.86 percent in U.S. trading hours. The internationally traded Brent fell 38 cents, or 0.99 percent, at $38.07 a barrel in Asia trade after tacking on 1.29 percent in U.S. trade.
U.S. markets posted around 1 percent gains in all three major indexes. The closed up 156 points, or 0.9 percent, at 17,525. The S&P 500 was up 21.5 points, or 1.06 percent, at 2,043 and was up 43 points, or 0.87 percent, at 4,995.
Shanghai closes in the green, HK up 2%
The Chinese markets traded mostly higher in the afternoon The pared most of its morning gains but still closed up 6.7 points, or 0.19 percent, at 3,517. The smaller Shenzhen Composite finished higher at 15 points, or 0.68 percent, at 2,280.
The Hong Kong market jumped, with the main up close 2 percent higher.
Mainland-listed brokerages lost gains from the morning session and closed mixed, ranging from down 0.53 and up 0.58 percent. Banking stocks closed down or remained unchanged at market close.
Before trading began, the People's Bank of China (PBOC) set the yuan mid-point at 6.4626, up from the previous session's fix of 6.4610.
The yuan flat at 6.4604 against the dollar.
Chinese energy plays also ended higher. Shares in China Petroleum were up 2.25 percent, while PetroChina was up 1.08 percent and China Oilfield rose 0.94 percent.
In Hong Kong, Prada shares dropped 6.95 percent after the luxury goods maker reported a slump in its profit, weighed by falling sales in the Greater China region. The company's profit declined 38 percent on-year in the quarter ended October 31.
Nikkei gains 2%, Kospi also in the green
The was back in positive territory, closing up 484 points, or 2.61 percent, at 19,050, with financial sectors seeing the biggest gains. The index shed 1.68 percent in Tuesday's session.
Among finance plays, Mitsubishi UFJ Financial Group was up 4.17 percent, SMFG rose 3.22 percent and Mizuho Financial Group gained 5.1 percent.
SMFG, Japan's second largest bank by revenue, announced on Tuesday it concluded an agreement with General Electric to buy the latter's leasing business in Japan for 575 billion yen ($4.8 billion).
Export plays Toyota, Nissan, Honda, and Sony were up between 1.91 and 4.48 percent.
Index heavyweights Fast Retailing and Fanuc also finished up 1.23 and 2.69 percent respectively.
Japanese oil plays gained: Inpex closed 2.77 percent higher, while Japan Petroleum saw a 3.57 percent uptick.
The yen traded lower at 121.87 against the dollar.
In South Korea, the Seoul Kospi ended up 36 points, or 1.88 percent, at 1,969.4.
Blue chip stocks finished higher with shares in Samsung Electronics up 1.72 percent, Posco up 2.47 percent, Kepco up 0.31 percent, Hyundai Motor up 0.99 percent and KB Financial Group up 1.77 percent.
Samsung Engineering shares closed up around 10.73 percent after the company said it expects further profits in 2016.
ASX closes positive territory
The Australian market was back in positive territory after falling to a two-year low on the previous trading day. The ASX 200 closed up 119 points, or 2.42 percent, at 5,028 with most sectors finishing in the green.
Banking stocks closed higher, with shares in Australia's four biggest banks - ANZ, Commonwealth Bank of Australia, Westpac, and NAB - up between 2.28 and 2.89 percent.
Shares in the country's two biggest miners, Rio Tinto and BHP Billiton, also finished 3.02 and 5.59 percent higher respectively.
Iron ore stocks traded mixed as iron ore prices saw a 0.7 percent uptick overnight, trading at $39.36 an ounce. Atlas Iron was up 20 percent, Fortescue was up 5.26 percent and BC Iron was down 4.17 percent.
Oil producers also traded higher, following the rally in crude prices overnight. Shares in Santos were up 5.18 percent, Oil Search rose 4.71 percent and Woodside Petroleum saw gains of 3.24 percent.
Elsewhere, shares in Domino's traded sharply higher, up 8.27 percent after the pizza chain announced expansion into the German market. Reports said the Australian chain teamed up with the London-listed Domino's Pizza Group to buy out one of Germany's largest pizza chains, Joey's Pizza, for EUR31.5 million ($86 million).
The Australian dollar traded higher at 0.7204 against the U.S. dollar.
Elsewhere in Asia
In Singapore, shares in Noble Group were up 7.69 percent after reports that the commodities trader is in talks to sell the rest of its agriculture business. The move would potentially boost the company's efforts to raise cash and avoid having its ratings cut to junk.
Correction: The article has been updated to reflect the Fed's decision is due on Wednesday.