Asia Markets

Asian stocks broadly higher after China stimulus

Asian stock markets mostly advanced on Monday, taking heart from a positive lead from Wall Street and as China rolled out its third interest rate cut since November.

On Sunday, the People's Bank of China (PBOC) announced a cut in its benchmark lending rate and one-year deposit rates by 25 basis points, effective on May 11, as growth in the Asian economic giant slowed to levels not seen since the global financial crisis.

While fresh policy support largely bolstered sentiment in Asia, some analysts fear that more aggressive cuts in the interest rates and reserve requirement ratio (RRR) indicate that the slowdown in the mainland may be larger than authorities had initially expected.

"The cut announced over the weekend justifies my view that China falls behind the curve in terms of controlling the slowdown. Everyone calls it engineered slowdown, but when you see how the duration of the interest rate cut has been compressed and how the RRR cut has been made at a more aggressive pace, it seems to me that China is catching up with the curve, rather than being fully in control," Nizam Idris, MD and head of Strategy, Fixed Income & Currencies at Macquarie, told CNBC's "Street Signs Asia."

U.S. stocks finished sharply higher end of last week as investors welcomed a "Goldilocks" jobs report. April's U.S. nonfarm payrolls report showed a rebound in job growth to 223,000, but slower wage growth at just a tenth of a percent. The improvement from March's 85,000 jobs calmed some nerves over the state of the U.S. economy, but wage growth was not enough, in the eyes of most traders, to warrant central bank tightening immediately.

The Dow Jones Industrial Average led gains with a rise of 1.5 percent, while the S&P 500 and Nasdaq Composite closed up 1.4 and 1.2 percent, respectively.

Mainland markets up

China's Shanghai Composite surged 3 percent, extending a rebound that began last Friday, on the back of the country's latest policy support measures.

The lowering of interest rates come on the back of muted inflation data for the month of April and after the Shanghai bourse suffered its worst performance since July 2010 last week, down 5.3 percent.

Meanwhile, mainland firms led Hong Kong's Hang Seng index up 0.6 percent.

Property counters were on a roll; Shanghai Shimao rose 2.1 percent, while Poly Real Estate and China Vanke advanced nearly 2 percent in Shanghai. China Overseas Land & Investment and China Resources Land tacked on 4.6 and 3 percent, respectively, in Hong Kong.

The banking sector turned higher in the afternoon session; Bank of Communications and China Construction Bank reversed a lower open to elevate more than 1 percent each in Shanghai. "China could cut interest rates by another 50 basis points in the third quarter to stabilize growth and that will put pressure on bank earnings, but it will be positive on stock prices because of lower risks of hard landing," Barclays analysts wrote in a note.

PBOC cuts rates: More firepower for China stocks?

Nikkei jumps 1.3%

Japan's Nikkei 225 steadied at a seven-day high, with the market spotlight firmly on electronics giant Sharp and industrial conglomerate Toshiba.

Shares of the Osaka-based Sharp plummeted nearly 30 percent to 196 yen following the announcement of a capital-reduction report and preferred share issuance as part of its restructuring plan. Toshiba also nosedived 16.6 percent after cancelling a dividend payment and withdrew its earnings outlook last Friday.

Gains in other exporter plays helped to support the bourse. Sony, which is lifting the price on camera-related goods by 5-20 percent in Japan, and Panasonic leaped more than 2 percent, respectively. Shares of Toyota Motor lost steam by midday, turning 0.5 percent lower, despite last Friday's robust report card showed record earnings for the fiscal year through March.

Heavyweight components helped to push the index further north; Fast Retailing and Fanuc rallied 2.8 and 1.7 percent, respectively, while Softbank added 0.6 percent.

Read MoreAsia, brace for a busy week ahead

Kospi rises 0.6%

South Korea's key Kospi index tracked Asia-wide gains to rise on the first trading day of the week.

Brokerage houses outperformed the bourse with stellar gains in early trade; Samsung Securities surged 6.4 percent, while Daewoo Securities and Mirae Asset Securities soared 3.3 and 2.2 percent, respectively.

Asiana Airlines reversed a lower open to notch up 0.3 percent, as first-quarter results released last Friday showed the country's second-largest flag carrier swinging back to the black, with the help of lower fuel costs and increased passengers and cargo to transport.

ASX slips 0.2%

Australia's S&P ASX 200 index gave up most of the strong gains made in the early hours of trade, as financial stocks turned negative and as investors looked ahead to the release of the federal budget on Tuesday.

Succumbing to selling pressure following a downbeat earnings season and amid speculation that the Reserve Bank of Australia (RBA) will be ending its easing cycle, Australia and New Zealand Banking and Westpac closed down more than 1 percent, respectively, while Commonwealth Bank of Australia shed 0.6 percent. "As the banks trade ex-dividend, with ANZ already having done so, the appeal wanes for some investors. This will probably keep the choppy price action in play all week as investors figure out their strategy going forward," IG's market strategist Stan Shamu wrote in a note.

The resources sector provided positive support, with the help of fresh easing from the mainland which is seen as a boost for commodities demand. Iron ore miners were the top gainers, with Arrium, Fortescue Metals and BC Iron advancing between 2.8 and 5.6 percent.

Firmer commodity prices from last week lifted sentiment for oil and gold producers as well; Oil Search and Woodside Petroleum rose more than 2 percent each, while Evolution Mining rallied 2.7 percent.

On the domestic data front, Australian businesses reported a slight pullback in sales and employment last month, while confidence stayed restrained, a survey by the National Australia Bank showed.