Asia report: Markets close higher after Xiao Gang exit

China led gains across much of Asia on Monday, with news from Beijing that the country's embattled securities chief was being replaced.

The Shanghai Composite closed up 2.35% at 2,927.18, after official media revealed over the weekend that Liu Shiyu was to replace Xiao Gang as head of the country's stock regulatory commission.

Shiyu was a veteran of the People's Bank of China, it was reported.

The replacement of Xiao was being seen by analysts as a positive for markets in the short term, so long as it brought with it further overhauls to the country's tightly-controlled financial system.

Xiao had come under heavy press fire in the last year for his policies and decisions, particularly the 'circuit breaker' which he personally championed as a method to stem volatility, which ended up backfiring.

"A key personnel change at the helm of the securities regulator has given some belief that change and reform will be good, potentially one day even helping to attract overseas capital," said IG chief market strategist Chris Weston.

Shares in Shanghai had fallen almost 50% since their peak last June, though they had gained overall during Xiao's time at the helm of almost three years.

Elsewhere, Seoul's Kospi was relatively flat, up 0.01%, the Hang Seng Index in Hong Kong closed up 0.9%, and the Nikkei Stock Average closed up 0.9%.

Airlines led the charge in Tokyo, as buyers focused on industries that would benefit from the generally lower oil prices. Japan Airlines lifted 5.59%, and All Nippon Airways was up 2.84%.

Japan's manufacturing sector expanded slower than expected in the last month, as the Nikkei Performance of Manufacturing Index shrunk to 50.2, down from 52.3 and markedly off the forecast 52.

HSBC fell 2.09% in Hong Kong, after the London-based bank revealed it was under investigation by US regulators over its hiring practices of 'princelings' - the term used in Asia to refer to the children or young relatives of Chinese officials or state-sponsored executives.

Down under, the S&P/ASX 200 closed up 0.98% and broke the psychological 5,000-point barrier to 5,001.20. Oil prices gained during the Asian trading day, boosting commodities and energy shares on the Sydney bourse.

Prices were still climbing as Asia headed towards Tuesday, with Brent crude last up 3.03% to $34.04 per barrel, and West Texas Intermediate up 3.3% to $32.83.

In Sydney, BHP Billiton moved up 3.4% while Rio Tinto was 3.2% higher.

Further east, the S&P/NZX 50 slipped 0.04%, led by a grim report from South Pacific transport business Freightways as the New Zealand earnings season continued.

In currencies, the yen was slipping away from its recent highs against the US dollar, down 0.42% to JPY 113.10 per USD. The Aussie dollar was 0.55% stronger to AUD 1.3912 against the greenback, and the Kiwi was 0.5% up to NZD 1.5002 per dollar.