Asia markets retraced much of their earlier losses to trade mostly higher on Tuesday, following the conclusion of the first U.S. presidential debate.
Some analysts attributed the turnaround in most Asian stocks to a market perception that Democratic nominee Hillary Clinton won the debate against Republican candidate Donald Trump, which was held late Monday U.S. time.
"Leading into the debate, traders were long volatility, anticipating a Trump victory and risk-off session," said Matt Simpson, senior market analyst at spreadbettor ThinkMarkets. "But as soon as traders caught a whiff of Donald's defeat, short bets were closed and risk sentiment improved."
CMC Markets' chief market strategist, Michael McCarthy, said the market was "searching for the least worse option between the two U.S. candidates."
"One is a known market bad, the other an unknown bad. Any ramping up of populist rhetoric would likely rattle investors. Any perception that the outsider candidate won the debate could bring a market rout," said McCarthy.
Australia's ASX 200 closed down 25.52 points, or 0.47 percent, at 5,405.90, after paring some of its 1 percent losses from early trade. The heavily-weighted financial sector closed down 0.79 percent, while the energy sector was lower by 0.75 percent.
Major banks in the country finished lower, with shares of ANZ down 0.54 percent, Commonwealth Bank of Australia was down 0.95 percent, Westpac was off 1.29 percent and National Australia Bank was lower by 0.21 percent.
In South Korea, the Kospi was up 15.73 points, or 0.77 percent, at 2,062.84, after reversing earlier losses of nearly 0.7 percent. In Hong Kong, the Hang Seng index was up 1.15 percent in late afternoon trade.
Chinese mainland markets erased early losses, with the Shanghai composite ending up 0.59 percent, or 17.45 points, at 2997.88, and the Shenzhen composite adding 0.75 percent, or 14.66 points, to 1981.26..
Japan's Nikkei 225 closed up 139.37 points, or 0.84 percent, to 16,683.93, erasing a nearly 1.3 percent loss in early trade. Stocks were under pressure earlier due to an overnight rise in the yen.
The Japanese yen also erased early strength. After the dollar/yen pair fell as low as 100.07, compared with around 100.85 on Monday afternoon local time, the pair recovered to 100.91 as of 2:19 p.m. HK/SIN.