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Asia stocks edge higher in cautious trade; China PMI in focus

Asian stock markets rose on Monday as a positive handover from Wall Street offset disappointing Chinese factory activity data.

Beijing's official purchasing manager's index (PMI) for August came in at 51.1, below Reuters expectations for 51.2 and July's reading of 51.7. HSBC's final PMI reading for August. Separately, HSBC's final August PMI reading fell to a three-month low of 50.2.

Read MoreWeek in Asia: China PMI, central banks

"Despite today's slower pace of [PMI] expansion, the longer-term trend is still in an upwards trajectory. The fact we have seen a limited reaction to the PMI data in the China CSI 300 and CME copper suggests that today's economic data print will not derail [China's] 7.5% growth target.," said Chris Weston, chief market strategist at IG.

On Friday, the S&P 500 logged another record finish, enjoying its best August in 14 years, on upbeat consumer confidence data. Markets will be shut on Monday for the Labor Day weekend.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Nikkei 0.3% higher

Japan's benchmark Nikkei index rebounded from a two-week low, snapping a two-session losing streak thanks to a depreciating currency. The yen weakened to a one-week low of 104.21 in early Asian trade, boosting exporters across the board.

Among top gainers, Nintendo rallied nearly 2 percent while Sony rose over 1 percent.

Nisshin Steel dropped 5 percent after announcing on Friday that it would offer up to 10.7 billion yen of its own shares.

Read MoreFinance execs split on upcoming stock 'correction'

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China shares gain

China's benchmark Shanghai Composite jumped 0.8 percent to a more than one-week high, extending gains after rallying 1 percent in the previous session, while Hong Kong stocks enjoyed modest gains following Friday's 1.5 percent weekly loss.

Read MoreChina real-estate: A bubble bursting

Defense stocks rallied in Shanghai after President Xi Jinping called for military reform and innovation over the weekend. Beijing Aerospace Changfeng jumped over 7 percent while Sichuan Chengfa Aerospace rallied by the daily trading limit of 10 percent.

ASX up 0.1%

Australia's benchmark S&P ASX 200 rose ahead of the central bank's policy review on Tuesday and quarterly growth figures on Wednesday.

Seven Group eased 0.6 percent on reports that it has taken a $100 million stake in Woodside Petroleum. The latter's shares jumped 1 percent.

Kospi flat

South Korean shares were little changed from Friday's close following disappointing trade data. August exports significantly missed forecasts while imports rose by a slower-than-expected pace.

Samsung Heavy soared 6 percent while Samsung Engineering surged over 12 percent after the two firms announced their decision to merge on Monday.

Read MoreDoes Samsung need crisis management?

Nifty at new record

India's NSE index breached the 8,000 level for the first time ever after Friday's better-than-expected quarterly growth data.

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