Asia stocks gain after Italian PM agrees to resign

Asian stocks climbed Wednesday, bolstered by easing inflation in China and Italian Prime Minister Silvio Berlusconi's promise to resign once a new budget is passed that could prevent the country being engulfed in a debt crisis.

Japan's Nikkei 225 index rose 1 percent to 8,742.32. South Korea's Kospi was 0.8 percent higher at 1,917.94 and Hong Kong's Hang Seng jumped 2.3 percent to 20,122.28. Australia's S&P ASX 200 rose 1.5 percent to 4,359.

Benchmarks i Singapore, Taiwan, mainland China, Malaysia and the Philippines also rose.

Italy became a key focus for investors this week after doubts emerged that the country would go through with a tough package of austerity measures. Many investors saw Berlusconi as an obstacle to sweeping economic reforms needed to hel Italy avoid sinking into a debt crisis.

Unlike Greece, Portugal or Ireland - all of which have received financial lifelines - Italy is too large and has too much debt to be rescued by its European neighbors.

Berlusconi is the second political casualty of the European debt crisis. In Greece, a new interimgovernment - that won't be led by the current prime minister George Papandreou - was to be announced Wednesday. New leadership was needed for the passage of a controversial austerity plan in Parliament that would entitle debt-riddled Greece to a (euro) 130 billion ($179 billion) European rescue package.