Asian shares hit highs on China rate cut

Asian shares surged as investors welcomed China's interest rate cut and comments from the European Central Bank hinting at more stimulus action.

An surprise rate cut by China's central bank on Friday sparked hopes of more stimulus action.

Sentiment was also boosted by Friday's comments from Mario Draghi, the head of the European Central Bank.

Mr Draghi said the ECB was ready "step up the pressure" and take more measures to try to boost growth in the eurozone.

The Hang Seng index closed up 456.02, nearly 2%, at 23,893.14 points on news of the cut.

On the mainland, the benchmark Shanghai Composite ended 1.85% higher at 2,532.88 points - its highest level since 2011.

Japanese markets were closed for a public holiday.

In Australia, shares hit a one-month high, thanks to the resources sector which jumped on hopes that the surprise rate cut in China would boost demand for commodities.

The S&P/ASX 200 index closed up 57.50 points, or 1.1%, at 5,361.8 - its biggest percentage gain since 22 October.

The rise also broke a five-day losing streak for the index.

Miners were among the biggest risers, with shares of BHP Billiton up 3.8% and Rio Tinto 3.4% higher.

South Korean shares climbed to a seven-week high, boosted by China's rate cut. China is the country's largest trading partner.

The benchmark Kospi closed up 0.7% at 1,978.54.

Growth-sensitive shipbuilders and petrochemical firms outperformed the broader market.

Hyundai Heavy Industries shares rose 5.6%, while LG Chem was 6.3% higher.