Asian equities are off to a winning start this year, with China emerging as the region's best performing market in the first quarter, followed by Japan in close second.
The MSCI Asia Pacific Index rose almost 7 percent in the first three months of the year, trumping the MSCI World Index's 3 percent gain over the same period.
"The outperformance is based on positive global factors plus some idiosyncratic domestic factors," Tai Hui, chief Asia market strategist at J.P. Morgan Funds told CNBC.
Abundant global liquidity, provided by the Bank of Japan and European Central Bank, combined with monetary accommodation via interest rate cuts by several central banks in the region and lower oil prices have bolstered sentiment towards Asian equities, he said.
China, Japan steal the show
China's Shanghai Composite has rallied 17 percent so far this year, supported by the central bank's monetary easing cycle and a re-engagement in the equities asset class by the local retail investors.
"It is noteworthy that since the end of Chinese New Year, both new account openings and market trading volume have moved significantly higher," Morgan Stanley wrote in a recent report.
Expectations of further monetary stimulus will continue to buoy the market going forward, say strategists.
"The authorities in China are on the case to support economic activity, and that's going to involve equity market friendly measures," said Tim Condon, head of research, Asia, ING Financial Markets. ING forecasts a cumulative 75 basis points of interest rate cuts and 150 basis points of reserve requirement ratio cuts by year-end.