Asian Markets Follow Wall Street Rally Amid Oil Price Stability

Asian markets kicked off the trading week on a cautious note, with investors following the global rally sparked by upbeat US manufacturing data. The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%, driven by South Korean shares which surged as much as 2.1%. However, Japan's Nikkei 225 slipped 0.3%.

The Wall Street lead was fueled by the US manufacturing data, which showed activity increasing to its highest level in over four years in July. This sent the Dow Jones Industrial Average to a record close overnight. According to Chris Weston, head of research at Pepperstone Group, 'Risk markets have clearly turned a corner.'

Oil prices held steady, with Brent crude up 0.6% at $84.29 a barrel. However, US President Donald Trump's statement that he had held off on a fresh attack on Iran as a gesture of goodwill in peace talks was met with skepticism from Tehran, which denied any negotiations were taking place.

The US dollar gained strength against the yen, rebuilding its losses after coordinated intervention by US and Japanese authorities last week. Market pricing indicates a 65% probability of a 25-basis-point hike at the Federal Reserve's next meeting in September, according to the CME Group's FedWatch tool.