Asian stock markets climbed Tuesday amid hopes that European leaders are considering new, radical proposals to extricate the region from a debt crisis that threatens to rip apart the euro currency union.
Benchmark oil fell below $98 per barrel and the dollar dropped against the euro but rose against the yen.
Japan's Nikkei 225 index rose 1.3 percent to 8,395.11, boosted by gains among the country's powerhouse export sector. South Korea's Kospi climbed 1.8 percent to 1,847.21 and Hong Kong's Hang Seng added 0.5 percent to 18,121.46. Benchmarks in mainland China and Taiwan were also higher while Singapore, Malaysia and India fell.
Fears that the European currency union is on the verge of shattering eased Monday after reports surfaced that Europe's leaders were considering steps once deemed taboo - such as having nations cede control over their budgets to a central European authority.
Another option is for the 17 nations in the euro grouping to sell bonds together, known as eurobonds, to help the countries in the deepest trouble because of debt.
Germany, with its top-notch credit rating, has steadfastly opposed participating in such a bond. But pressure on Berlin to change its stance has intensified as the region's debt crisis burgeons from small economies like Greece to major ones like Italy, threatening to bust apart the eurozone.
Finance ministers were likely to discuss the options - plus a possible way to boost the region's rescue fund, the European Financial Stability Facility - at a meeting later Tuesday.
While markets were posting gains, the absence of strong momentum suggested investors still saw troubling times ahead, according to Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong.
"The uncertainly over the euro debt crisis will continue to be a major key for the markets," Pang said.
A strong start to the U.S. holiday shopping season boosted hopes for growth in the world's No. 1 economy.
Hong Kong-listed Zijin Mining Group, China's largest gold miner, rose 4.5 percent. Japanese steel maker JFE Holdings jumped 4.5 percent.
Japan's export giants posted solid gains as the persistently strong yen weakened against the dollar. Hitachi Ltd. soared 5.5 percent, Fujitsu Ltd. gained 2.6 percent, and Honda Motor Corp. added 2.4 percent.
Hong Kong retailers also rose. Jewelry seller Luk Fook Holdings jumped 6.2 percent on strong demand from China for jewelry and gold. Clothing retailer Esprit Holdings gained 4 percent.
World stock markets, glimpsing hope that Europe might finally be shocked into stronger action, staged a big rally Monday. France's CAC-40 jumped 5.5 percent. Indexes in Germany and Italy rose 4.6 percent.
The Dow Jones industrial average rose 291 points, or 2.6 percent - its biggest gain in a month - to close at 11,523.01. The S&P 500 rose 2.9 percent to 1,192.55. The Nasdaq composite rose 3.5 percent to 2,527.34.
Benchmark crude for January delivery was down 48 cents to $97.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.44 to settle $98.21 on Monday.
In currency trading, the euro rose to $1.3344 from $1.3306 late Monday in New York. The dollar rose to 78.07 yen from 77.99 yen.
The Associated Press