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Hong Kong - Most Asian markets climbed on Tuesday on growing hopes that Greece and its creditors will finally hammer out a debt reform deal that will avoid a default and possible eurozone exit.
The gains tracked a record close for the Nasdaq on Wall Street while European markets also soared, including a nine percent surge in Athens. But the euro retreated in Japanese trade as investors await the next move.
Investors were also cheered by preliminary figures suggesting a contraction in Chinese manufacturing activity may be easing.
Tokyo soared 1.87% to end at 20 809.42, breaking through 20 700 for the first time since April 2000.
Sydney advanced 1.32% to 5 684.3 and Seoul closed up 1.27% at 2 081.20.
Shanghai, which plunged more than 13% last week before a long weekend, ended 2.19% higher, adding 98.13 points to 4 576.49. Hong Kong rose 0.93% to 27 333.46.
Eurozone leaders said they were confident they would bring an end to the five-month crisis over Greece's bailout reform after it submitted proposals aimed at freeing up much-needed cash to help it pay its bills.
Cash-strapped Greece is at risk of defaulting on a €1.5bn IMF payment on June 30 if it fails to reach a deal. That could lead to it crashing out of the eurozone and even the European Union.
After an emergency summit in Brussels on Monday, eurozone chiefs told their finance ministers to hold fresh talks on Wednesday to thrash out details of an accord before a summit of the 28 EU leaders on Thursday.
EU sources told AFP that Greece had now met 90 percent of the conditions set by its creditors, while European Commission chief Jean-Claude Juncker told a news conference he was "convinced" a deal would be done.
However, a Greek bank source said the European Central Bank (ECB) would make available emergency liquidity funds for the country's lenders for a fourth time since Wednesday.
The move, providing an unspecified amount, comes as Greek savers continue withdrawing cash in large volumes owing to fears about a default.
On Wall Street Monday the Nasdaq rose 0.72% to a new record, the Dow added 0.58% and the S&P 500 advanced 0.61%.
Athens rocketed 9.0%, while there were also big gains across Europe's other major markets, which were extended in early trade Tuesday.
"Hopes are likely to heighten for a positive outcome over the Greek issue before a European Union summit later this week after Greece signalled readiness to compromise," Yujiro Goto, currency strategist at Nomura Holdings, told Bloomberg News.
However, the euro eased to $1.1261 and ¥139.27 in Tokyo trade from $1.1340 and ¥139.91 in New York late on Monday.
While the single currency was underpinned by optimism about a Greece deal, analysts said it is being hurt by the prospect that the European Central Bank will stick to its massive easing programme as the US Federal Reserve prepares to tighten.
The dollar was at ¥123.67 against ¥123.38 in New York and well up from ¥122.73 in Tokyo earlier on Monday.
Buying on Tuesday was also supported by HSBC's early June reading of China manufacturing. Its purchasing managers' index came in at 49.6, just below the 50 mark that separates contraction from growth but up from May's 49.2. It also beat a forecast of 49.4 by economists surveyed by Bloomberg.
The figures fuel hopes the world's number two economy may be about to pick up after a series of interest rate cuts in response to a sharp slowdown over the past several quarters.
On oil markets US benchmark West Texas Intermediate for August delivery was down 38 cents at $60.00 a barrel in afternoon Asian trade, and Brent dropped 13c to $63.21.
Gold fetched $1 830.00 compared with $1 192.86 late on Monday.
In other markets:
- Taipei rose 0.53% to 9 391.14.
Taiwan Semiconductor Manufacturing gained 1.76% to Tw$144.5 while Fubon Financial Holding closed 1.89% higher at Tw$64.8.
- Wellington was flat, edging up 0.08 points to 5 772.13.
Air New Zealand was up 1.00% at NZ$2.525 and Contact Energy slipped 1.35% to NZ$5.12.
- Manila closed 0.76% lower, giving up 57.58 points to 7 551.56.
- Mumbai inched marginally higher by 0.27% to end 27 804.37 points.
Coal India gained 3.85% to 415.15 rupees, while Infosys fell 2.27% to 1 001.15 rupees.
- Malaysia's key index lost 0.34% to 1 726.86.
Maybank dropped 0.64% to 9.28 ringgit, Tenaga Nasional fell 0.31% to 13.06 ringgit while Genting Malaysia gained 0.24% to 4.22 ringgit.
- Bangkok slipped 0.06% to close at 1 503.23
Coal producer Banpu lost 0.97% to 25.50, while Bangkok Bank edged down 0.28% to close at 178.00.
- Singapore closed up 0.74% to 3 339.78.
United Overseas Bank gained 1.04% to Sg$23.27 while oil rig maker Keppel fell 0.12% to Sg$8.40.
- Jakarta ended down 0.44% at 4 937.65.
Private hospital group Siloam International Hospitals gained 1.87% to 13 600 rupiah, while auto company Astra International slipped 2.50% to 6 825 rupiah.
