HONG KONG (NikkeiMarkets) -- Asian shares outside of Japan advanced Monday amid bets that central banks would step in to bolster the sagging global economic outlook.
The Nikkei Asia300 Index of companies outside Japan rose 1% to close at 1,233.13.
Asian equities were also helped by the improved risk tone on Wall Street. The S&P 500 Index ended 1.4% higher on Friday and equity index futures on the benchmark gauge pointed to another positive session on Monday.
The risk appetite was aided by a report by Der Spiegel magazine that Germany was prepared to put aside its rule of a balanced budget and take on new debt in the event of an economic downturn. The report comes in the wake of data that showed that Germany's economy contracted in the April-June period on a quarter-on-quarter basis.
Equities in Asia received a further boost after China's central bank announced over the weekend a reform of the interest rate system that analysts said will lower cost of funds for borrowers. The new measures make the loan prime rate the benchmark for fixing lending rates.
ANZ Research said that according to its estimate, the reform is equivalent to making a 45 basis-points loan rate cut. The decline in loan rates bodes well for China's credit demand and growth outlook for the second half of the year and will help offset the impact of the ongoing trade disputes, it added.
In addition to Germany and China, traders are banking on support from the Federal Reserve. According to Fed fund futures, there is a 100% probability that the U.S. central bank will cut rates once again at next month's meeting.
An index of Chinese companies listed in Hong Kong closed 1.5% higher on Monday. China Overseas Land & Investment jumped 3.6% and China Vanke added 1.7%. Heavyweight Tencent Holdings advanced 3.2%.
China Resources Beer jumped 4.6%, extending Friday's 7.8% rally following upbeat earnings. The company is weighing the possibility of acquiring a minority stake in the Asia-Pacific unit of the world's largest brewer Anheuser Busch Inbev, although a final decision is yet to be taken, its Chief Executive Jason Hou said Friday.
China Eastern Airlines advanced 3.2% after the passengers it carried last month reportedly increased 8.2% from a year earlier.
Cathay Pacific Airways rose 0.9%. The Hong Kong airline's board accepted the resignation of CEO Rupert Hogg and Chief Customer & Commercial Officer Paul Loo. The resignation came after a Chinese regulator issued a safety risk warning to the carrier over its management of staff who had participated in the city's mass protests.
Sun Pharmaceutical Industries rose 2.7%. The Indian drugmaker and China Medical System Holdings entered into licensing agreement for generic products in mainland China. Shares of China Medical System rallied 9.7%.
Samsung Heavy Industries jumped 7.1%. The South Korean shipbuilder won an order worth 751 billion Korean won ($621 million) to build 10 crude oil carriers. Its peer Korea Shipbuilding & Offshore Engineering ended 7.6%higher.
--Nimesh Vora
