On Tuesday, Australia's S&P/ASX200 rose 0.5%, while Japan's Nikkei advanced 1.1% as risk-on sentiment pushed U.S. stocks higher.
China's CSI300 index gained 0.7% and Hong Kong's Hang Seng Index .HSI advanced 1.3% as the central bank freed up $188 billion in liquidity through a policy easing.
The People's Bank of China said on Monday it would cut the amount of cash that banks must hold in reserve, its second such move this year, releasing the funds in long-term liquidity to bolster slowing economic growth.
The world's second-largest economy, which staged an impressive rebound from last year's pandemic slump, has lost momentum in recent months as it grapples with a slowing manufacturing sector, debt problems in the property market and persistent COVID-19 outbreaks.
Monday's move acted as "a convenient, if not coincident, cushion for Evergrande's looming debt default," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.
Shares in embattled developer Evergrande rose 7% after hitting a record low on Monday as markets awaited if the real estate giant has paid $82.5 million coupons with a 30-day grace period coming to an end.
Elsewhere, markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.
"While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," said Varathan from Mizuho Bank said.
"After all, early assessments of Omicron cases have been declared mild, spurring half-full relief."
Omicron has spread to about a third of U.S. states, but the Delta version accounts for the majority of COVID-19 infections in the United States, health officials said on Sunday.
Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN it does not look like Omicron has a "great degree of severity."
Stocks on Wall Street closed a sea of green as value stocks, led by banks and energy shares, rose 1.5% compared to a 0.9% gain in growth stocks.
The risk-on mood also helped the dollar climb against safe haven currencies such as the Japanese yen, which lost 0.6% overnight, while the risk-friendly Australian dollar also found buyers.
Also supporting the dollar was the expectation that the Federal Reserve will accelerate the tapering of their bond-buying program when they meet next week in response to a tightening labour market. They also are likely to hike rates earlier than projected to keep inflation down.
Oil prices ticked higher, consolidating a nearly 5% rebound the day before as concerns about the impact of the Omicron variant on global fuel demand eased.
Brent crude futures rose 0.6% to $73.5 a barrel, after settling 4.6% higher on Monday.
Gold prices were steady at $1,779.5 per ounce on expectations U.S. consumer price data due later this week will show inflation quickening.
(Reporting by Anshuman Daga; Editing by Sam Holmes) ((firstname.lastname@example.org;))
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