China's blue-chip CSI300 index rose 0.5 percent, to 3,447.10 points by the lunch break, while the Shanghai Composite Index gained 0.4 percent to 3,142.67 points.

Yang Hai, strategist at Kaiyuan Securities, described the rebound, which came after the market's over 1 percent drop on Monday - the biggest percentage loss for the year - as "technical" in nature.

"The market bounced after being over-sold," Yang said, attributing the recent weakness to regulatory tightening.

"The regulatory crackdown on shadow banking is targeting mainly the banking system, not the stock market, but equities have been implicated."

Analysts also cited the heavy-handed crackdown on speculation by top securities regulator Liu Shiyu, who is guiding money into cash-rich blue-chips.

Underlining the tightening regulatory environment, the official Xinhua News Agency said late on Monday that the new draft of China's securities law would tighten rules preventing insider trading and better protect the interests of investors.

Most sectors gained on Monday, with consumer stocks outperforming the broader market with a 2.3 percent rise, continuing the recent trend.

An index tracking liquor makers jumped 2.7 percent, as Kweichow Moutai Co, which produces the Chinese alcoholic drink baijiu, flirted with record highs, jumping 4.3 percent.

HONG KONG

In Hong Kong, the Hang Seng index added 0.9 percent to 24,366.98 points, while the Hong Kong China Enterprises Index gained 1.3 percent, to 10,240.64.

Overnight, the MSCI World index surged 1.6 percent to an all-time high, as French stocks jumped over 4 percent.

Wall Street gained over 1 percent, as the market priced in expectations that Emmanuel Macron, an internationalist, would likely defeat anti-euro nationalist Marine Le Pen in the second round of the French presidential election in two weeks.

(Samuel Shen and John Ruwitch; Editing by Sam Holmes)