Image Credit: Agencies

Sydney, Hongkong: Asian shares advanced to new highs on Monday following Wall Street's lead while gold hovered near three-week highs at $1.304.11.


Gold rush ahead of Dhanteras, Diwali
Video: Dubai gold pricess soar further

MSCI's broadest index of Asia-Pacific shares outside Japan gained for a fifth day running to be up 0.3 percent, after US stocks ended at record highs.

Australian shares extended their winning streak to a fourth straight session to rise 0.6 percent, while Japan's Nikkei rallied for a sixth day to the highest since November 1996.

China will be in the driver's seat this week ahead of the start of a leadership transition event and key economic data including inflation and third quarter economic growth.

In Hong Kong, shares rose in the first few minutes of trade on Monday following another record lead from Wall Street, with investors welcoming a healthy US retail sales report.

The Hang Seng Index added 0.65 percent, or 185.55 points, to 28,661.98.
The benchmark Shanghai Composite Index edged up 0.08 percent, or 2.68 points, to 3,393.21 but the Shenzhen Composite Index, which tracks stocks on China's second exchange, opened 0.05 percent, or 1.10 points, down at 2,035.70.

Policymakers globally are counting on a pick up in inflation while they look to wind back some stimulus as global growth gathers momentum.

But persistent modest readings in US core consumer prices continued, with underlying inflation benign at 0.2 percent in August, data showed on Friday.

That is a worry for the US Federal Reserve which has been engaged in a vigorous debate on the inflation path as it tightens its ultra-loose policy.

The reading sent US Treasury bond prices rallying with the yield on 10-year notes at 2.287 percent versus a top of 2.40 percent last week, as investors trimmed the implied probability of a December rate hike.

Currency markets

The dollar index, which measures the greenback against a basket of currencies, was mostly unchanged at 93.115.

The euro was a touch softer at $1.812 and was poised for its third straight day of losses on lingering concerns about the eurozone after a conservative Austrian leader secured a victory in parliamentary elections at the weekend.

In Germany, Chancellor Angela Merkel prepares for tricky coalition talks after her party suffered a defeat at the hands of the Social Democrats in a vote in the northern state of Lower Saxony on Sunday.

Meanwhile, Catalan leader Carles Puigdemont has until 0800 GMT on Monday to clarify whether he is calling for the region's independence from Spain, with Madrid threatening a return to direct rule if his stance remains ambiguous.