EU leaders agreed on releasing a 120 billion euro ($149 billion) package intended for rejuvenating the economic growth of the euro zone and agreed to take emergency action to bring down Spain's and Italy's ballooning borrowing costs.
The leaders also agreed to use the continent's future permanent bailout fund, the European Stability Mechanism (ESM), to recapitalize struggling banks directly without increasing a country's budget deficit and without preferential seniority status.
Because market expectations on the summit were so depressed, it was a bit like there was a drop of rain in desert. But it's not clear exactly what was agreed so we still need to see the debate in the second day of the summit, Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank, told Reuters.
Japanese shares rallied as news from Europe shrugged off weak industrial production data which showed that output fell 3.1 percent in May. Benchmark Nikkei surged 1.50 percent or 132.67 points to 9,006.78.
Financial and automaker companies' shares rallied. Nomura Holdings Inc. surged 3.89 percent and Mitsubishi UFJ Financial Group rose 1.61 percent while Toyota Motor Corp gained 2.57 percent and Honda Motor Co surged 3.23 percent.
Exporter companies' shares also rallied with Canon Inc and Panasonic gained more than 1.75 percent while Sony surged 2.37 percent.
Chinese stock markets surged, led by gains from financial shares. Chinese Shanghai Composite rose 1.35 percent or 29.59 points to 2225.43 and Hong Kong's Hang Seng surged 2.29 percent or 436.36 points to 19461.63.
Industrial and Commercial Bank of China gained 2.63 percent and Hutchison Whampoa advanced 2.31 percent in Hong Kong while Citic Securities surged 4.73 percent.
South Korean Seoul Composite advanced 1.91 percent or 34.83 points to 1854.01 and Indian benchmark BSE Sensex surged 2.13 percent. Woori Finance Holdings climbed 5.06 percent and Shinhan Finance Group Co surged 4.2 percent in Korea while State Bank of India gained 2.23 percent and HDFC Bank advanced 2.06 percent in India.