SINGAPORE Hong Kong stocks led gains in Asia on Monday, supported by the prospect of the US economy likely dodging a recession, while signs of state support lifted Shanghai-listed banks to record highs.

Hong Kong's Hang Seng Index closed 0.8% higher to 17,569.57.

The Shanghai Composite Index rose 0.49% to 2,893.67. MSCI's Asia ex-Japan stock index advanced 0.8%, while Japan's Nikkei fell 1.8% as the yen rose sharply. China's blue-chip CSI 300 index climbed 0.34%, with its banking sub-index up 1.9%, its largest one-day percentage rise in six months.

Shanghai-listed shares in Agriculture Bank of China hit a record high. The Industrial and Commercial Bank of China, the country's biggest lender, rose 2% and was set for a ninth consecutive session of gains.

Investors were lured by generous dividend payouts by Chinese banks, while heavy inflows into a handful of blue-chip exchange-traded funds used by state-backed funds also boosted sentiment.

Gold miners including Chifeng Jilong, Hunan Gold Corp and Zhongjin Gold jumped after bullion prices hovered near record peaks.

The top gainer among H-shares was JD Health International Inc, gaining 7.93% as positive results at JD.com last week buoyed sentiment about the group.

"We don't see any particular change of the sentiment of the market, or investors. Their view is still quite worried about the economy and the property market," said Steven Leung, UOB Kay Hian's executive director.

US rate cuts are eagerly awaited, said Leung, as Hong Kong's financial system is tied to US rates by the Hong Kong dollar peg.

US Federal Reserve chair Jerome Powell will speak in Jackson Hole on Friday. Investors assume he will acknowledge the case for a cut.

The yuan was quoted at 7.1388 per US dollar, 0.29% firmer than the previous close of 7.1595.

So far this year, the Shanghai stock index is down 2.7%, and the CSI 300 has fallen 2.2%.

  - Reuters