The Hang Seng Index went into the midday trading break up 0.1 percent at 23,344.3, nearing its highest level since June 2011 posted last Thursday. The China Enterprises Index of top Chinese listings rose 0.1 percent.

In the mainland, the Shanghai Composite Index and the CSI300 of top Shanghai and Shenzhen listings each rose 0.2 percent. Gains in Hong Kong and China came in healthy trading volumes.

But all four indexes have relative strength index (RSI) readings either near or at their highest since October 2010, suggesting they are technically overbought.

"The rally is starting to look like it's gone a bit too far ahead of fundamentals, with fast money chasing the high beta names," said Edward Huang, equity strategist at Haitong International Securities.

On Monday, HSBC Holdings climbed 1.2 percent after after global regulators gave banks four more years to build up cash buffers so they can use some reserves to help struggling economies grow.

In Hong Kong, Chinese coal producers rose on hopes increased mainland demand will boost margins as temperatures in China plunged to their lowest in almost three decades. Higher coal prices will, however, crimp the profitability of power producers.

Despite coal prices declining last week, according to a note by Goldman Sachs dated Sunday, Chinese coal stocks have climbed since Beijing said they would no longer intervene in annual coal price negotiations between sellers and utilities starting in 2013.

On Monday, Yanzhou Coal Mining rose 2.3 percent to return to its highest levels in Hong Kong in almost eight months, while China Resources Power dipped 3.1 percent, slipping further from a 4-1/2-year high set on January 2.

Center>Copyright Reuters, 2013