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Shanghai outperforms Asia; US stimulus hopes lend support

Asian equities kicked off the week higher on Monday as investors took cues from the S&P 500's record high last week and as bets on extended U.S. monetary stimulus lifted risk appetite.

The Shanghai Composite outperformed by 1.6 percent, Australia's S&P ASX 200 hit a new five-year peak, Japan's Nikkei closed at a three-week high and South Korea's Kospi ended at a new one-and-a-half year high. Indian stocks were the region's underperformer, down 0.4 percent.

On Wall Street, the S&P 500 closed at an all-time high for a second straight session as traders cheered better-than-expected corporate earnings results.

(Read more: What's important in Asia this week)

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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US data in focus

This week brings a deluge of U.S. data following delays due to the partial government shutdown, with the closely-watched non-farm payrolls report slated for Tuesday. Analysts say that given the impact of the shutdown, the Federal Reserve will likely delay any reduction in its bond-buying program.

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"In the next couple of weeks, you're going to see calmer markets because any data that comes out, everybody's going to be discounting it and asking how much of that was impacted by the government shutdown and how much of it is real," said Kumar Palghat, managing director of Kapstream Capital.

(Read more: Buckle up: Here come the economic data)

Nikkei up 0.9%

A weaker currency overshadowed lackluster trade data for Japanese investors. The nation posted a record losing streak of trade deficits for a 15th consecutive month while exports rose at a slower-than-expected pace of 11.5 percent.

"If anything, the worse-than-forecast trade balance reinforces the market's view that the BOJ can afford to be more aggressive in in October 31 meeting," said Chris Weston, market strategist at IG.

Dollar-yen hovered around the 98-handle, retreating further from Friday's one-week low of 97.55, and that boosted major industrial exporters. Automaker Suzuki Motor rallied 2.3 percent while Nintendo tacked on 1.6 percent.

Index heavyweight Softbank added 2.7 percent after paying $1.26 billion for a majority stake in Brightstar, a New York-based distributor of mobile phones.

The index rose above 14,640 points to close at its highest levels since September 27.

Shanghai 1.6% higher

China's benchmark index accelerated gains to hit a one-week high after Premier Li Keqiang stressed the importance of maintaining reform implementation at a State Council meeting on Sunday.

Fosun Pharmaceutical Group surged by the maximum daily limit of 10 percent after its subsidiary entered a licensing agreement with Switzerland's SELLAS Clinical.

Real-estate developers erased earlier gains to rally ahead of the nation's monthly house price index. China Merchants Property rose 1.5 percent while Shanghai Shimao added nearly 2 percent.

(Read more: Asia's commercial property deals set for record year)

Sydney rises 0.6%

Australian equities rose above the 5,330 mark to hit their highest levels since 2008 for a second straight session thanks to strong gains in miners.

Sundance Resources surged 28 percent, extending last week's strong rally. The miner released a statement to the ASX last week saying it is not aware why shares have been trading so heavily.

BHP Biliton rose 1.4 percent ahead of releasing quarterly production figures on Tuesday while Fortescue Metals rallied 3 percent.

Qantas Airways skidded 5.6 percent after flagging rough business conditions on Friday.

Seoul flat

South Korea's benchmark index closed at its highest level since March 2012 and traded 5 percent above its 200-day simple moving average (SMA) of 1,949 points.

Samsung Electronics fell nearly 0.5 percent ahead of rival Apple's new iPad release on Tuesday.

LG Chemical lost 3.4 percent after announcing a 14 percent annual fall in third-quarter operating profit on Friday.

(Read more: Emerging markets poised for further rally: BofA-ML)

India flat

India's benchmark index moved off a new three-year high of 20,932 points as the rupee weakened half a percent to 61.5 per dollar.

By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC

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