Tokyo - Markets extended gains in Asia on Tuesday with investors hunting for bargains in shares beaten down to 2012 lows late last week, as hopes grew that Europe could agree on fresh action to tackle its debt crisis while promoting growth.
A Chinese media report saying Beijing will accelerate infrastructure investments to combat slowing growth lifted Hong Kong and Chinese shares by 1.2% and 0.6% respectively.
European shares looked likely to extend gains, with financial spreadbetters predicting that major European markets
would open as much as 1.0% higher. US stock futures were up 0.1%.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4%, having recovered on Monday from a plunge to a 2012 low on Friday.
The increase was led by the technology, industrials and materials sectors, all of which had been battered in recent sessions by fears over Greece's departure from the euro bloc and global growth slowdown, particularly in China.
Australian shares gained 1% as investors picked up miners and mining services companies on expectations China will undertake further stimulus to maintain an expansion.
"Last week was quite brutal in terms of the selling ... Was that totally necessary?" said Martin Angel, a dealer at Patersons Securities, adding that BHP, Rio Tinto and gold miners had been hit too hard. "I reckon there's good opportunities to pick them up while they're at these levels."
Seoul shares rose back above the key technical chart level of 1,800 points as investors saw value in battered blue-chip technology shares such as Samsung Electronics .
"The sell-off in technology shares last week was overdone, especially given that the business outlook has changed very little," said Won Sang-pil, an analyst at Tong Yang Securities.
Bargain hunters also lifted Japan's Nikkei stock average 1.1%.
Copper, which fell to a four-month low below $7 500 a tonne last week, climbed 0.5% to $7 766 a tonne.
Xstrata, the world's fourth-largest copper miner, said on Tuesday Chinese demand for copper was likely to improve in the second half. The remarks came after some miners have sounded a cautious note on expansion.
Markets are sensitive to demand and growth prospects in China, the world's leading consumer of materials and second-largest economy, as the financial crisis weighs on European growth while fragile spots remain for the United States.
So it's no surprise that the media report on China fast-tracking infrastructure projects boosted regional shares on Tuesday.
Evidence that strictly abiding by austerity measures to fix the eurozone's debt restructuring has only compounded the situation prompted leaders of the G8 major industrialised nations to call for promoting growth.
Markets are now keeping watch on a European Union summit on Wednesday intended to focus on specific steps to spur growth and create jobs across the bloc.
Optimism escapes euro
Despite the general improvement in market sentiment, the euro slipped 0.2% to $1.2784. It hit a four-month low of $1.2642 on Friday when concerns about Greece exiting the euro were compounded by mounting banking stress in Spain.
"Talk about growth is fine. But it comes down to a question of who will shoulder the bill for it. Unless it becomes clear, the fog on the eurozone won't disappear," said Katsunori Kitakura, associate general manager at Sumitomo Mitsui Trust Bank.
Market gauges showed players remain guarded against funding stresses, with the three-month spread between Libor rates and overnight index swap rates refusing to shrink further from around 30 basis points over the past two months.
But appetite for the yen, widely seen as a safe-haven currency, decreased slightly, with the currency trading away from its three-month high near ¥79 hit on Friday. The yen stood at ¥79.38 on Tuesday.
Given that market sentiment had turned extremely bearish on the Greek political turmoil, if the EU meeting at the very least indicates a shift in approach to the eurozone crisis, the current correction in currencies will likely extend a bit, said ANZ in a research note.
At Wednesday's informal EU meeting, France's new president, Francois Hollande, is likely to propose mutualising European debt.
The idea of bonds jointly underwritten by all eurozone member states could fend off contagion of funding difficulties from troubled eurozone economies, but Germany remains opposed.
US crude futures inched up 0.2% at $92.73 a barrel on Tuesday, after adding 1.19% the day before. Brent rose 0.1% to $108.93 a barrel after gaining for the first time in four sessions on Monday and settled up 1.56%.
Asian credit markets firmed on Tuesday, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by six basis points.