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Asia stocks gain on stimulus hopes; Nikkei at new 7-year high

Asian equities were mostly higher on Thursday following a rally in global markets overnight amid hopes for additional monetary stimulus in China and Europe.

Reports overnight that Chinese President Xi Jinping is considering replacing the head of the central bank sparked expectations for looser monetary policy in the world's second-largest economy.

"A change of the guard at the People's Bank of China might mean a more aggressively loose monetary policy going forward to help counter-act the growth slowdown. But in China, it's tough to tell whether it's a monetary thing or power consolidation," said Chris Konstantinos, director of international portfolio management of Riverfront Investment Group.

Read MoreWhat PBOC leadership changes may mean for markets

Meanwhile, the euro fell to a new 14-month low after European Central Bank chief Mario Draghi repeated his commitment to use "additional unconventional instruments" to support economic growth during an interview with Lithuanian media on Thursday. His remarks follow Germany's disappointing Ifo business climate index on Wednesday and fueled expectations for more stimulus to be announced at the bank's October meeting.

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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Nikkei rallies 1.3%

Japan's benchmark Nikkei index closed at a fresh seven-year peak for the second time in a week, with exporters getting a boost from a weaker yen. The currency traded at 109.1 per dollar, near Friday's six-year low of 109.45.

Mitsubishi Motors and Fuji Heavy Industries were among the top gainers, up 4 percent each.

Panasonic rose 1.3 percent on news it will take a near 50 percent stake in Spanish auto-parts manufacturer Ficosa.

Read MoreThe bulls are back, but the selloff may not be over

Shanghai 0.3% higher

China's benchmark Shanghai Composite rose to its highest levels since March 2013, extending gains into a third straight session.

Nuclear power-related shares were among the top gainers after the country's central planning agency said it planned to start four projects that would generate more nuclear power. SUFA Technology Industry rallied by the daily limit of 10 percent.

Insurers fell after S&P warning that an increase in exposure to shadow banking assets could hurt insurers. New China Life Insurance and Ping An Insurance dropped 1 percent each.

Read MoreChina is trying (but failing) to draw tourists

ASX up 0.1%

Australia's benchmark S&P ASX 200 index rebounded after closing down 0.7 percent on Wednesday. Speaking at the Melbourne Economic Forum, central bank governor Glenn Stevens said he was open to adopting macro-prudential tools and repeated his concerns about lending standards for housing investors.

"After the release of an interesting financial stability report and the board's concerns around property investment and unbalanced lending, there are signs Stevens might need to break his mantra around macro-prudentials and increase regulation,," said Evan Lucas, market strategist at IG.

Global miner BHP Billiton added 0.3 percent after announcing that it is considering listing a planned spin-off company in London.

Read MoreThai stocks: Chase the rally or cut loose?

Kospi flat

South Korean shares erased earlier gains after breaching the 2,040 level for the first time this week.

Hyundai Motor fell over 1 percent as its labor strike continued with around 40,000 workers planning to walk off the job again on Thursday.

Nifty drops 1.1%

Indian shares fell while the rupee hovered near the previous session's one-week lows on fears of higher coal imports following a court's decision to block extraction permits.