Asia: Stocks gain on PBoC's rate cut

Asian stocks gained as China’s central bank cut its benchmark lending and deposit rates by 0.25 percentage points.

The People’s Bank of China on Sunday lowered interest rates to 5.1% and the deposit rate to 2.25%. It marked the third time in six months the bank has reduced interest rates amid a slowdown in the world’s second largest economy.

"China's economy is still facing relatively big downward pressure," the PBOC said.

"At the same time, the overall level of domestic prices remains low, and real interest rates are still higher than the historical average," it said.

The rate cuts, effective on Monday, come just days after disappointing April trade and inflation data.

"We have opined for some time now that the Chinese government had been showing signs of concern about slowing economic momentum […] We believe that further easing by the country’s central bank remains on the cards in 2015," said analyst Yuen Low from Shore Capital.

Shanghai’s composite finished up 3.05% while Hong Kong’s Hang Seng index rose 0.51%. Japan’s Nikkei 225 increased 1.25%.

Among stocks, Toshiba plunged after saying it was withdrawing its annual earnings forecast pending an internal investigation into improper accounting on infrastructure projects.

China Overseas Land & Investment Ltd. advanced in Hong Kong as mainland developers rallied on lower borrowing costs.

Sharp Corp. declined after the maker of displays said it was looking into offloading shares and reducing capital.