Hong Kong gains
Traders take part in the afternoon trading at the Hong Kong Stock Exchange, in August, 2012.

Most Asian markets posted gains in early trade with the Japanese and Hong Kong indices leading the pack, buoyed by Wall Street touching record highs on 17 May.

Japan's Nikkei average hit a new 5-1/2 -year high as it jumped 1.5% or 228 points to 15366.15. The positive sentiment in Japan, the world's third biggest economy was supported by signs that the US economy, the world's largest, was improving. The Japanese government also upgraded its outlook for the economy, fuelling a rally in Tokyo.

The yen gained against the dollar, rising from a 4-1/2-year low against the dollar, after Japan's economy minister said a weaker yen could hurt the economy.

Hong Kong's Hang Seng, which remained closed on 17 May for a holiday, rose 1.7% or 403.42 points to 23,486 boosted by positive sentiments coming in from the US

China's Shanghai composite index rose 0.9% or 20.32 points to 2303.19, supported by realty stocks. Australia's S&P/ASX was up 0.9% or 47 points to 5227.70 supported by mining stocks.

South Korea's Kospi was up nearly 0.1% or 1.31 points to 1988.12 after a weak opening.

On Wall Street, both the S&P 500 and the Dow ended at record highs, boosted by a positive economic outlook and consumer sentiment.

In Tokyo, shares of utility major Tokyo Electric Power shot up 15.2%, after the Nikkei newspaper reported that Goldman Sachs plans investments in 'green' energy.

Shares of shipping giant Nippon Yusen K.K shot up 10.2%, while Sony gained 5.9%. Panasonic gained 3.9% following reports that it would lay of nearly 90% of Sanyo Electric's remaining workforce and integrate the latter into itself. Petroleum major Inpex rose 3.5%.

In Hong Kong, coal miners China Coal Energy and China Shenhua Energy gained 4% and 4.5%, respectively. Cnooc rose 2.3%.

Shares of Chinese property developers jumped after Wall Street Journal data showed that average home prices in 70 mainland cities rose 4.3% in April, from a year-ago. Shares of China Resources Land rose 4% in Hong Kong, China Overseas Land & Investment moved up by 2.8% while Gemdale Corp gained 2.9% in Shanghai. China Vanke rose 1.3% in Shenzhen.

In Sydney, mining stocks advanced with Alumina and BHP Billiton gaining 3.3% and 1.6% respectively. Gold miner Newcrest Mining lost 0.5% after a drop in gold futures.

Oil and gas major Santos rose 2.6% in Sydney.