Most Asian markets gained on Tuesday, led by a jump in Japan shares, as oil prices steadied after Monday's drop on producers' failure to reach a production-freeze deal over the weekend.

The benchmark Nikkei 225 jumped 3.51 percent, retracing its 3.4 percent loss in the previous session, boosted by a relatively weaker yen against the dollar and as market players digested the extent of damage from last week's earthquakes.

Australia's ASX 200 added 1.13 percent, with the energy and materials subindexes leading gains. In South Korea, the Kospi advanced 0.15 percent. Hong Kong's Hang Seng index was up 0.84 percent. Chinese mainland markets fell behind slightly, with the Shanghai composite down 0.1 percent and the Shenzhen composite slipped 0.12 percent.

Oil prices retreated a tad during Asian hours, after paring most losses overnight. Global benchmark Brent was down 0.19 percent at USD 42.83 a barrel as of 10:28 a.m. HK/SIN time, after settling down 0.4 percent. US crude futures were flat at USD 39.77 a barrel, after finishing lower by 1.4 percent overnight.

On Sunday, the world's largest oil exporting countries failed to reach an agreement in Doha, Qatar, to freeze output at January levels in order to tackle the global supply glut.

The deal's failure initially sent oil prices tumbling over 5 percent. The reversal came after reports said that a workers' strike in Kuwait had hit the gulf country's daily oil output. Reuters reported that the strike cut the OPEC producer's crude output by more than 60 percent, from about 3 million barrels per day to about 1.1 million.

Analysts said Kuwait's reduction in output remains supportive for crude for the time being.

Energy stocks in the region rebounded Tuesday morning, with shares of Santos up 2.84 percent, Oil Search advancing 4.66 percent and Woodside Petroleum up 3.41 percent. Japan's Inpex advanced 2 percent, while Chinese mainland shares of China Petroleum were up 0.62 percent.

The reversal in oil prices gave an overnight boost to commodity currencies such as the Australian dollar.

The Aussie traded at USD 0.7770 as of 9:56 a.m. HK/SIN time, compared with around USD 0.76 during Asian hours in the previous session.

"Investors were relieved that oil did not fall 10 percent on the back of the Doha meeting and they were quick to reward risk currencies like the Australian and New Zealand dollars with gains," said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a morning note.

In the minutes of its most recent meeting, released Tuesday, the Reserve Bank of Australia said it was concerned about the impact of a rising currency, but noted that low inflation could allow it to cut interest rates further. At the April 5 meeting, the RBA had kept rates steady at a record-low 2 percent.

The Japanese yen also pulled back, with the dollar/yen pair trading at 109.03 in the morning after touching levels under 108 in the previous session.

Major Japanese exporters saw a rebound in their stock prices, with automakers Toyota, Nissan and Honda adding between 3.02 and 4.09 percent. Shares of Sony rebounded 6.3 percent. Shares of exporters, which typically benefit from a weaker yen, had tumbled in the previous session after reports that some manufacturers were affected by the earthquakes that struck Kyushu island in the south of Japan last week, causing sizable damage.

Reuters reported that Sony and Honda have said their affected production plants in the region will remain suspended for the time being. Toyota said it would suspend production at plants across the country, following the disruption in its supply chain due to the quakes, said Reuters.

Analysts didn't expect broader damage to Japan's economy.

Marcel Thieliant from Capital Economics said in a morning note, "the scale of damage does not appear huge and production shutdowns by major manufacturers should be reversed before long."

But Thieliant added that in the short term, the impact of the disaster would be felt outside of the Kumamoto prefecture. In particular, he said the "shutdown at Toyota could reduce industrial output by up to 1.8 percent in April," adding the impact will be larger if the shutdown persisted for longer.

Major US indexes closed up overnight, with the Dow Jones industrial average adding 0.6 percent, the S&P 500 gaining 0.65 percent and the Nasdaq composite up by 0.44 percent.

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First Published:Apr 19, 2016 8:47 AM IST