China's rate cut buoys Asia stocks; yuan at over two-year low

Asian stocks kicked off the week on a positive note, as an interest rate cut in China on Saturday offset a weaker finish on Wall Street last week and data indicating shaky growth in the world's top two economies.

The People's Bank of China lowered its benchmark interest rate by 25 basis points to 5.35 percent and reduced the benchmark saving rate by a similar margin to 2.5 percent.

Meanwhile, HSBC's final reading of China's manufacturing sector in February came in at 50.7, much higher than the flash reading of 50.1 and the official February reading announced over the weekend, which showed a second straight month of contraction due to unsteady exports and slowing investment.

U.S. equities ended lower last Friday as economic growth in the world's biggest economy slowed more sharply than initially thought in the fourth quarter. Analysts polled by Reuters expected GDP growth of 2.1 percent, after a final reading of 5.0 percent in the third quarter.

The blue-chip Dow Jones Industrial Average and tech-heavy Nasdaq Composite shed 0.5 percent, while the S&P 500 index finished 0.3 percent lower.

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CNBC 100

Nikkei rises 0.2%

Japan's Nikkei 225 index trimmed gains, but hovered near fresh 15-year highs, as the dollar-yen touched a two-and-a-half-week high of 119.8. Also helping sentiment was news that the country's trillion-dollar public pension fund bought a more-than-expected $15 billion worth of domestic shares in the fourth-quarter.

Among blue-chip exporter stocks, Toshiba and Toyota Motor closed up 0.7 percent, respectively, while Sony and Mitsubishi Electric dropped 2 and 0.7 percent each.

Telecom giant NTT Communications rallied 2.6 percent on news that it is looking to acquire German data center operator e-shelter.

On the domestic data front, Japanese companies raised spending on factories and equipment in the final quarter of 2014, data from the Ministry of Finance showed early Monday, underscoring a pick-up in business investment.

Read MoreIt's a big week for Australia, China

Shanghai Comp up 0.8%

Chinese shares held near a four-week high attained earlier at the open, after wavering between gains and losses following the release of HSBC's final PMI data. Market analysts attribute the "lukewarm response" in the mainland stock markets to the fact that the move had been largely expected.

"The cut to both the deposit rate and lending had been largely speculated in local media for some time, so it shouldn't necessarily surprise," IG's chief market strategist Chris Weston said.

Brokerages saw robust gains, with Founder Securities and Citic Securities up more than 1 percent each. Property majors trimmed gains after two private surveys showed home prices fell again in the month of February; Gemdale, China Vanke and Poly Real Estate elevated between 0.2 to 1.1 percent, respectively.

Meanwhile, the yuan weakened to 6.2731 against the dollar - its lowest level since October 2012.

ASX up 0.5%

Australia's S&P ASX 200 index closed at its highest level since end-May 2008 ahead of the Reserve Bank of Australia's (RBA) policy meeting tomorrow, where the central bank is widely expected to announce another interest rate cut.

"Local data have weakened in recent weeks so consistent with the RBA's below-trend outlook, another cut is needed. While it could pause for another month or two, why wait? With that in mind, we expect another 25-basis-point cut to 2.00 percent," HSBC analysts wrote in a note.

Mining and banking heavyweights are on a roll on Monday; Rio Tinto and BHP Billiton piled on nearly 2 percent each, while the National Australia Bank and Australia & New Zealand Banking led gains among the big four lenders with a rise of over 1 percent each. Westpac and Commonwealth Bank of Australia advanced 0.8 and 0.7 percent each.

Myer Holdings bucked the rising trend, down nearly 11 percent, following news that the retailer named Richard Umbers as its new chief executive officer. and managing director.

Kospi adds 0.6%

South Korea's Kospi index settled at a five-month high as the heaviest weighted stock Samsung Electronics surged 4.9 percent. The stock was buoyed by the release of the Galaxy S6 and curved screen S6 Edge at the Mobile World Congress in Barcelona, along with a mobile payment system as the electronics giant attempts to compete with U.S. rival Apple.

Indian bourses up

Both the BSE and Nifty indexes rose 0.3 and 0.6 percent, respectively, after the announcement of a budget that aims to ramp up growth over the weekend.

CNBC's Evelyn Cheng contributed to this report.