Asia Posts Modest Gains, Led by China Stocks

Asian stocks ended slightly higher on Monday, helped by a 3 percent boost in mainland Chinese shares but trading volume remained light with Japanese financial markets shut for a public holiday.

Investors are closely monitoring Japan's central bank as it faced unrelenting political pressure to deliver bold stimulus after Prime Minister Shinzo Abe's comments over the weekend, causing the yen to hit a fresh 2-1/2 year low on Monday.

Also on the radar is China's fourth quarter economic growth due Friday, which may have quickened to 7.8 percent, a Reuters poll showed, snapping seven straight quarters of weaker expansion.

ASX 200
CNBC 100

The FTSE CNBC Asia 100 index inched up 0.1 percent.

China shares rebounded to close at their highest level since June after a top securities regulator said Beijing could significantly increase the quota for foreign investors to invest in mainland markets.

The CSI300 of the top Shanghai and Shenzhen listings rose 3.2 percent, while the Shanghai Composite Index rallied 3.1 percent to 2,313.4 points.

The air pollution in north China over the weekend boosted energy shares, as investors bet that pollution-related policies would lead big, listed companies to profit at the expense of smaller players. China Shenhua Energy rose 2.5 percent, while PetroChina rose 1.3 percent.

China's largest poly silicon and wafer maker GCL-Poly Energy Holdings slipped 4.7 percent after saying it expected to record a substantial loss in 2012 due to anti-dumping and countervailing duties imposed by the United States.

The Hang Seng Index closed up 0.6 percent at 23,413.2 points while the China Enterprises Index of top Chinese listings in Hong Kong finished up 1.3 percent.

Li & Fung shares slumped 15.4 percent after the exporter warned of a 40 percent fall in full-year 2012 core operating profit, hit by ongoing restructuring costs.

Shares in Citic Telecom surged 12.9 percent after it agreed to buy a 79 percent stake in a Macau telecom company from Cable & Wireless Communications and Portugal Telecom for $1.2 billion.

South Korean stocks reversed earlier losses and ended up, with institutional and retail investors snapping up shares ahead of key economic data from China later this week.

The Korea Composite Stock Price Index finished up 0.5 percent at 2,007 points.

Telecom shares led the market's gains after a brokerage raised hopes that they would post solid earnings in the December quarter on reduced marketing expenses. SK Telecom gained 4.2 percent, while LG Uplus jumped 4.9 percent.

Heavyweights gained ground, with Samsung Electronics up 1.2 percent and Hyundai Motor rising 1.5 percent.

LG Display tumbled 2.2 percent to its lowest level in nearly three months, after the Nikkei reported that its Japanese peers cut panel output amid slower-than-expected iPhone 5 sales.

Woongjin Holdings rose by the 15 percent limit after media reports said a court had approved its plan to sell its chemical unit, Woongjin Chemical.

Australian shares inched up 0.2 percent as investors turned their eyes toward the U.S. corporate earnings season.

The benchmark S&P/ASX 200 index finished the day 10.2 points higher at 4,719.7. The index fell 0.3 percent last week.

The banking sector was mixed, with the Commonwealth Bank of Australia and National Australia Bank leading gains by 0.4 percent each while Westpac lost 0.4 percent.

Miners also finished the session with mixed results. Global iron ore producer BHP Billiton fell 0.3 percent while Rio Tinto managed to end up 0.09 percent. Fortescue Metals lost 0.2 percent.

Australia's largest steelmaker, BlueScope Steel, fell 0.3 percent after it announced 170 job cuts and reduced production in its cold rolling, metal coated and painted steel production in Western Port.

Australia's Altona Mining dropped 10.7 percent after announcing it may sell its Roseby copper project or seek to merge with another firm after global miner Xstrata decided not to buy into Roseby in Queensland state.

New Zealand's benchmark NZX 50 index finished up 0.5 percent to 4,153.9 points.

Over in Southeast Asia, Singapore's Straits Times Index ended 0.3 percent lower after the government launched sweeping measures to cool the housing market, where property prices have soared to record highs due to low interest rates and huge demand from real estate speculators.

Shares in major developers CapitaLand lost more than 4 percent, while Keppel Land and City Developments both shed over 6 percent.

Meanwhile, Malaysia's KLCI Composite Index closed up 0.1 percent.

India's BSE Index ended up 1.4 percent, marking its highest close since January 6, 2011, while the 50-share NSE Index finished 1.2 percent higher.