Markets in Asia finished mostly higher, with major indexes in China, Japan and Australia leading gains, extending last week's advance. But analysts weren't confident of the rally's longer term sustainability.
"Markets remain unsure of themselves. While the brief rally in risk assets early last week helped soothe sentiment a little, there remains much uncertainty about what will follow," analysts at Citigroup said in a note Monday. "Many investors are fearful about the erosion of G3 central banks' omnipotence amid signs that the global economy has lost momentum."
Chinese markets lead the pack, with the main advancing 67.71 points, or 2.37 percent, to 2,927.73, while the smaller Shenzhen composite gained 37.66 points, or 2 percent, to 1,888.18.
The Japanese benchmark index, the , closed up 143.88 points, or 0.90 percent, at 16,111.05. The Japanese yen remained strong against the dollar, with the pair hovering around the 112-handle.The dollar-yen was at 112.86 by 2:49 p.m. HK/SIN time. That's down from levels over 120 at the beginning of the month, shortly after the Bank of Japan announced its shift to a negative interest rate policy.
Across the Korean Strait, the Kospi wavered between gains and losses to close flat at 1,916.36. In Hong Kong, the was up by 0.96 percent by 3.37 p.m. HK/SIN time.
Down Under, the S&P/ASX 200 closed up 48.42 points, or 0.98 percent, at 5,001.22, with most sectors up in the green; the heavily weighted financial sector gained 0.92 percent.
The gains follow a volatile start to the year.
"Market volatility eased last week amid improved risk sentiment," ANZ bank said in a note early Monday. "The principal drivers of the better mood were a rebound in oil (partly due to the agreement between Saudi Arabia and Russia) and positive U.S. data," the bank said. Reports emerged late last week, citing Russia's energy minister, on a possible output freeze deal by March 1.
"In addition, uncertainty over the renminbi was reduced somewhat after PBOC Governor Zhou indicated that there was no foundation to the view the renminbi was overvalued," the bank said.
Oil prices, which remain at multi-year lows, posted gains during Asian hours, with U.S. crude up 1.72 percent at $30.15 a barrel as of 3.33 p.m. HK/SIN time, after settling down 3.67 percent on Friday during U.S. hours. Global benchmark Brent crude was up 1.36 percent at $33.46 a barrel after dropping 3.85 percent during U.S. hours on Friday.
Energy plays in the region finished the session mixed, with shares of Woodside Petroleum declining 1.35 percent and Inpex losing 4.81 percent. But Japan's Fuji Oil and Australia's Oil Search bucked the trend to close up 0.98 and 1.68 percent, respectively.
Chinese mainland oil stocks were mostly up, with shares of China Oilfield gaining 2.23 percent.
Leading oil producers, including Russia, Saudi Arabia, Qatar and Venezuela, held talks in Doha last week where they said they were ready to freeze production at January levels if other producers did the same. While Iran welcomed the deal, the Persian state stopped short of saying it would itself freeze production at January levels and its deputy oil minister said on Saturday it would increase production soon.
"The euphoria from a potential oil production freeze amongst OPEC members and Russia quickly dissipated as Iran and Iraq remained non-committal on such deal," said Chang Wei Liang from Mizuho Bank in a note Monday.
Earnings season continued in Australia, with Bluescope Steel reporting its fiscal first-half numbers.
The Australian steelmaker reported net profit of A$200.1 million ($142.8 million) for the six months to December 31, up from A$92.7 million in the year-earlier period. Its shares added 1.64 percent.
Logistics firm Brambles reported net profit for the six months to December 31 rose 2 percent on-year to $290.9 million and it increased its full year guidance. The company's interim dividend was set at A$0.145 ($0.10) a share. Brambles shares closed up 8.50 percent.
One of Singapore's biggest lenders, DBS Group, reported net profit for the three months ended December 31 rose 20 percent on-year to 1 billion Singapore dollars ($711 million), beating expectations from a Reuters poll for S$978 million. But the bank's charges for non-performing loans rose 17 percent on-year. DBS shares erased gains of as much as 1.61 percent and traded down 0.51 percent.
HSBC announced a 1 percent rise in its pretax profit for 2015 to $18.8 billion. It missed the Reuters expectations for $21.8 billion. For the last three months of 2015, the lender recorded a net loss of $1.3 billion, compared with a net profit of $511 million a year earlier.
The Hong Kong-listed shares of HSBC retraced gains of as much as 1.49 percent to trade down 2.29 percent.
Over the weekend, reports emerged that China removed the head of its securities regulator, Xiao Gang, and replaced him with Liu Shiyu, the chairman of Agricultural Bank of China and a former deputy governor at the People's Bank of China (PBOC).
Xiao Gang's departure from the China Securities Regulatory Commission (CSRC) was announced on the official Xinhua news agency.
The CSRC and Xiao faced criticism from China's leadership for his handling of the stock market crash last year, according to reports. Earlier this year, the regulatory body was dealt another blow when its touted "circuit breaker" mechanism, meant to help stabilize markets, had only a four-day run before being deactivated. It shut trading in China twice in four days during its short-lived run.
Chinese financial stocks gained, with brokerages Citic Securities, Huatai Securities and Founder Securities seeing gains between 2.84 and 3.25 percent, while major banks closed up over 1 percent each. Shares of Agricultural Bank of China added 1.69 percent.
Wall Street closed mixed Friday. The finished down 21.44 points, or 0.13 percent, at 16,391.99, while the S&P 500 finished flat at 1,917.78 and the finished up 16.89 points, or 0.38 percent, at 4,504.43.
Later this week, finance ministers and central bank governors of G20 nations will gather in Shanghai for a two-day meeting to discuss ways to bolster global economic growth.
Ray Attrill, global co-head of FX strategy at the Fixed income, Currencies and Commodities division of National Australia Bank, said in a note that the gathering is likely to underwhelm.
"While we might hope for some assurances from central bankers that they are not engaging in a race to the bottom on negative interest rates and that the Fed is not going to risk further upsetting febrile markets by pushing ahead with 'gradual' policy tightening anytime soon, risk is high that central bankers return to home shores and proceed on their (domestically driven) policy ways," he wrote.
Already, countries such as Denmark, Japan, Sweden, and Switzerland have introduced negative interest rates, alongside the eurozone, which has sparked concerns that central bankers are fast running out of options to boost their economies.
Attrill added, "The prospect of any meaningful commitment to fresh fiscal support by G20 nations to shore up global growth looks similarly slim, albeit the noises about 'helicopter money' being the next policy shoe to drop - Milton Friedman's concept of fiscal handouts funded via the printing presses - are becoming a little louder."