Japan's Nikkei 225 Stock Average rose Monday as investor concerns were eased following the Greek election in which pro-bailout parties won the majority.
The Nikkei rose 1.76 percent or 150.95 points to 8,720.27 and the Topix index rose 1.64 percent or 11.89 points to 738.46. Among major gainers were Mitsubishi UFJ Financial Group (3.1 percent), Daiwa Securities (2.7 percent), Nomura (2.6 percent) and Mizuho Financial (2.5 percent).
Investors breathed a sigh of relief as the Greek election results raised hopes that the country will support austerity measures to receive the much-needed bailout package required to prevent its exit from the euro zone.
The Syriza party that stood against implementing austerity measures did not win the majority, boosting the confidence of the market players.
The euro also strengthened against the Japanese yen as the Interior Ministry of Greece projected that the New Democracy and PASOK parties won 162 out of the 300 seats in the country's parliament. The weak yen against the euro helped the stocks of major exporting companies gain significantly, led by Nissan Motor (3.1 percent), Toyota Motor (2.6 percent) and Honda Motor (2.5 percent).
Market sentiments were severely affected following the previous Greek elections in May in which the political parties could not come to an agreement to form a government. Investors were worried that if Greece did not receive a bailout package, it would result in a collapse in its banking system, leading to its exit from the euro zone.
However, the markets are not completely out of the red yet, despite the positive results in the current elections. The debt crisis continues to loom large over the euro zone with Spain and Italy facing increasing borrowing costs. Investors will focus on the G20 leaders' summit in Mexico on Monday and Tuesday, where the euro zone crisis is expected to dominate the discussions.