Chinese shares led gains in Asia on Monday, touching a five-year high on rising stimulus bets, but growing expectations for a sooner-than-expected rate hike in the U.S. and lower oil prices capped advances elsewhere in the region.
U.S. stocks finished last week on the back foot as a week of mixed economic data, renewed U.S. dollar strength and sharply lower oil prices made traders cautious ahead of next week's Federal Reserve meeting. The Dow Jones Industrial Average closed down 0.8 percent, while the S&P 500 finished 0.6 percent lower. The tech-heavy Nasdaq lost 0.4 percent.
Shanghai Comp soars 2.2%
China's Shanghai Composite hit its highest level since August 2009 as comments by Premier Li Keqiang over the weekend heightened expectations of further stimulus. At the conclusion of the annual parliamentary session, the Chinese Premier sounded a warning on the economy and said that Beijing has room and the tools to step in should growth falter and impact employment.
Mainland lenders were upbeat, with Agricultural Bank of China and Industrial Bank being among the most active stocks traded on Monday. Both shares elevated 0.9 and 3.5 percent each. Brokerages also saw robust gains, with Huatai Securities and Haitong Securities leaping 4.5 and 2.3 percent each.
Offshore Oil Engineering bolstered 1.3 percent after delivering a 55.5 percent rise in 2014 net profit.
Bucking the uptrend was state-owned carmaker FAW, whose shares sagged nearly 2 percent following news that its chairman Xu Jianyi is being investigated for corruption.
Nikkei flat
Japan's Nikkei 225 index scaled a fresh 15-year high of 19,349, but gave up gains at the end of the day as industrial robot maker Fanuc turned negative. The index heavyweight, which was a key contributor of the benchmark index's surge above the 19,000 mark last week, settled 0.6 percent lower.
Some exporters such as Suzuki Motor and Nintendo provided some support for the bourse, up 2.7 and 1.4 percent each. Financials also raked in gains, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group notching up 1 and 1.6 percent each. Fukuoka Financial Group, meanwhile, made it to the list of top gainers, up 4.6 percent.
On Monday, the Bank of Japan (BoJ) commences its two-day monthly meeting and analysts expect the central bank to "stay put" on its pace of quantitative easing.
"The BOJ is likely to stay put because there's no need to do anything. The fundamentals in Japan are finally coming together, with wage growth accelerating, business investment expenditure rising and corporate governance improving," Jesper Koll, MD & head of Japan equity research at JP Morgan, told CNBC's "Street Signs Asia."
A combination of a strong domestic recovery, plus the focus on shareholder value, make a good stock market," he added.
Read MoreAsia hinges on central bank actions this week
ASX falls 0.3%
Australia's S&P ASX 200 index closed down modestly after trimming losses from earlier steep falls of nearly 1 percent with the help of financials. The big four lenders rebounded in mid-morning trade, with National Australia Bank and Commonwealth Bank of Australia eventually finishing 0.5 percent higher each, offsetting losses from the resources sector.
Oil-related majors were stung by the turmoil in oil prices. Oil Search slumped 3.8 percent, while Woodside Petroleum and Santos tanked 2.2 and 2 percent each.
The mining space, meanwhile, saw a mixed picture as iron ore dropped to $57.66 a tonne overnight. BHP Billiton eased 1.2 percent, while Fortescue Metals and Rio Tinto rose 0.5 and 0.7 percent, respectively. Copper miner Sandfire Resources retreated 1.8 percent after OZ Minerals offloaded its 19 percent stake in the miner last Friday.
Kospi adds 0.1%
South Korea's Kospi index ticked up into positive territory after hovering near the flatline all morning, while the won stayed near a 20-month low ahead of the Federal Reserve's policy meeting this week.
Among index heavyweights, Hyundai Motor and Samsung Electronics notched up 2 and 0.9 percent, respectively, buoyed by the weaker currency. But losses among the energy sector capped advances; S-Oil and SK Innovation lost over 4 percent each.
Meanwhile, the number of credit rating downgrades for South Korean companies was at a 15-year high in 2014, according to data compiled by the Korea Investors Service (KIS), amid weaker earnings and an economic slump.
Nifty sheds 0.4%
Indian stocks hit a four-and-a-half-week low after data showed wholesale prices fell by a faster-than-expected pace of 2.06 percent on-year in February.