Asian markets mostly higher on Italy lead

Asian markets mostly rose on Tuesday after another record close on Wall Street, while sentiment was also boosted by news that a new government had finally been formed in Italy after months of deadlock.

Japan's Nikkei, which was closed Monday for a holiday, was stuck in negative territory, however, as a stronger yen outweighed data pointing to a tentative recovery in the world's number three economy.

Tokyo fell 0.17 percent, or 23.27 points, to 13,860.86 and Seoul rose 1.20 percent, or 23.25 points, to 1,963.95, while Sydney jumped 1.28 percent, or 65.4 points, to 5,191.2. In the afternoon Hong Kong added 0.47 percent.

Shanghai was closed for a public holiday.

Dealers followed gains on Wall Street and in Europe after a coalition government was formed at the weekend in Italy, bringing to an end two months of uncertainty in the recession-hit country that had raised concerns over the eurozone.

Enrico Letta and his cabinet were sworn in on Sunday and he immediately promised to act fast to reverse an austerity policy he argued was killing the country, adding that "growth policies cannot wait".

The news from Rome lifted investor sentiment, with Milan stocks up around two percent, while the country's borrowing costs fell sharply.

Wall Street also welcomed the announcement and the broad-based S&P 500 rose 0.72 percent to an all-time record, while the Dow also climbed 0.72 percent and the Nasdaq added 0.85 percent.

While most of Asia's markets were higher, Tokyo edged down after a long weekend that saw the yen pick up some strength in the wake of the Bank of Japan's decision to hold off any fresh monetary easing measures.

The bank stood still on Friday, weeks after unveiling a huge stimulus programme, which is part of Prime Minister Shinzo Abe's drive to ramp up spending to boost growth and end years of deflation.

The dollar was changing hands at 97.78 yen in afternoon trade, from 97.73 yen in New York late Monday. The greenback had been sitting at around 99.30 yen the day before the BoJ's announcement.

The euro fetched $1.3070 and 127.80 yen, against $1.3097 and 128.01 yen.

However, economists said the outlook was bright for Japan after data showed a modest pickup in factory output in March as unemployment hit its lowest since November 2008. There was also a rise in household spending.

"Despite stock price weakness, the signs for Japan's economy are positive," said CLSA equity strategist Nicholas Smith, who noted that data for March shows a rise in household spending and a fall in the jobless rate.

"Some of the data can be attributed to the 'Abenomics' effect on consumer confidence," Smith told Dow Jones Newswires.

On oil markets New York's main contract, light sweet crude for delivery in June, dropped 18 cents to $94.32 a barrel and Brent North Sea crude for June was down 28 cents at $103.53.

An ounce of gold fetched $1,463.70 at 0740 GMT compared with $1,470.70 late Monday.

In other markets:

-- Taipei rose 0.80 percent, or 63.92 points, to 8,093.66.

Taiwan Semiconductor Manufacturing Co was 1.39 percent higher at Tw$109.5 while leading smartphone maker HTC added 3.79 percent to Tw$301.0.

-- Wellington rose 0.73 percent, or 33.41 points, to 4,614.37.

Fletcher Building was up 1.14 percent at NZ$8.64, Chorus added 0.73 percent to NZ2.75 and Air New Zealand was steady at NZ$1.50.