Asian markets mostly rose Monday following US gains and ahead of a Chinese legislative session where Beijing's annual growth target and other key policies will be announced.

Japan's benchmark Nikkei 225 index surpassed the 40,000 mark for the first time, with analysts predicting it could advance even further, lifted by Wall Street rallies, robust corporate earnings and optimism over AI.

In New York, the S&P 500 and tech-rich Nasdaq ended Friday at all-time highs off continued momentum for equities linked to artificial intelligence, especially AI-powering chip-maker Nvidia, which finished with a valuation above $2 trillion for the first time. Tokyo and Frankfurt also hit records.

Taiwanese chip-maker TSMC rose to a record high Monday, gaining 5.2 percent on the global rally in chip stocks, and helped Taipei's Taiex index add nearly two percent.

The solid performance of global markets provides "favourable trade winds for Asian markets as the new week begins", Stephen Innes of SPI Asset Management said in a note.

Hope for US interest rate cuts, indications of cooling inflation and soaring passion for AI within the tech sector have driven investor sentiment, he said.

"These factors collectively contribute to the positive tone in global markets, which is expected to bolster Asian markets and inspire confidence among investors as they commence trading for the week," Innes added.

While the US Federal Reserve is now expected to begin trimming rates later rather than sooner this year, due to recent hotter-than-expected inflation data, markets have been boosted by stellar earnings results from big tech firms in recent weeks.

Investors will be looking this week to the release of US jobs figures and Fed boss Jerome Powell's testimony to Congress.

"We don't expect the chair to stray very far from the Fed's recent messaging -- officials are in a 'wait-and-see' mode as there's still a lot of ambiguity in the data," John Briggs, global head of desk strategy at NatWest Markets, said in a note.

Hong Kong was trading lower on Monday and Shanghai closed higher ahead of the start of China's annual legislative conclave, with officials expressing concern over the nation's struggling economy and youth unemployment as they ready to present policies for the coming year.

Later Monday, another official said China's leaders had "ample confidence" that the economy would rebound.

The so-called "rubber stamp" parliamentary meeting is expected to see leaders set an annual growth goal of about five percent for 2024, said Innes, following a reported national GDP expansion of 5.2 percent last year, the lowest rate in decades, excluding the pandemic years.

"The announcements and policies unveiled during the parliamentary session will provide crucial insights into China's economic priorities, strategies, and potential market developments, shaping investor sentiment and asset allocation decisions domestically and globally," he added.

While analysts have called for stronger interventions from Beijing to boost the economy, Innes said a "Big bang" stimulus could "exacerbate existing imbalances and pose risks to long-term financial stability".

"Therefore, Chinese leaders will likely pursue more measured and strategic interventions to support growth while maintaining their commitment to quality-driven development."

Seoul, Mumbai, Manila and Kuala Lumpur were up, while Sydney, Wellington, Jakarta and Singapore were down.

Tokyo - Nikkei 225: UP 0.5 percent at 40,109.23 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 16,518.30

Shanghai - Composite: UP 0.4 percent at 3,039.31 (close)

Euro/dollar: UP at $1.0852 from $1.0841 on Friday

Dollar/yen: UP at 150.35 yen from 150.11 yen

Pound/dollar: UP at $1.2668 from $1.2656

Euro/pound: UP at 85.66 pence from 85.65 pence

Brent North Sea Crude: FLAT at $83.56 per barrel

West Texas Intermediate: DOWN 0.1 percent at $79.87 per barrel

New York - Dow: UP 0.2 percent at 39,087.38 (close)

London - FTSE 100: UP 0.7 percent at 7,682.50 (close)