Major Asian indexes closed mostly higher on Monday, as regional markets appeared to shrug off heightened geopolitical tensions in the Korean Peninsula and digested the release of China PMI data.
In Australia, the benchmark S&P/ASX 200 index edged up 0.31 percent, or 17.782 points, to close off its session highs at 5,720.6. The broader index was driven by the strong showing in its materials sub-index, which finished the session up 1.52 percent.
Hong Kong's rose 1.22 percent to 27,307.91 by 3.17 p.m. HK/SIN after touching 27,321.31 earlier in the session — its highest level since May 2015, according to Reuters.
Mainland markets shrugged off the release of slightly lower-than-expected China PMI data to close higher. The was up 0.64 percent, or 20.8924 points, to close at 3,274.1328 and the Shenzhen Composite gained 0.574 percent, or 10.7235 points to finish at 1,879.0959.
Market movers in the China markets included companies in the metals space, with Baotou Steel closing higher by 10.2 percent and Aluminium Corporation shares listed in Shanghai climbing 9.93 percent.
In China, official manufacturing PMI for July stood at 51.4, compared to a Reuters forecast of 51.6. The July figure was also below June's reading of 51.7. Meanwhile, the official services PMI came in at 54.5 for July, compared to the 54.9 seen in June.
While manufacturing PMI data tends to be more closely watched, China's pivot toward domestic consumption and away from investment-led growth means the services sector accounts for a bigger slice of the mainland economy.
"China's PMIs suggest further expansion, albeit with measured acceleration," said Mizuho Bank FX strategist Chang Wei Liang in a Monday morning note.
"This is consistent with a pick-up led by electronics and infrastructure-related activities. Nonetheless, the recovery is somewhat uneven."
The Australian dollar, which is sensitive to Chinese economic data, declined before the release to trade as low as $0.7953 on the news compared to levels around the $0.798 handle seen earlier. The Aussie dollar recovered to trade at $0.7979 at 2:55 p.m. HK/SIN.
The dollar recouped some losses after edging down Friday on the back of lackluster second-quarter U.S. GDP figures. The dollar index, which measures the dollar against a basket of six major currencies, traded as low as 93.256 in the Friday session after hitting as high as 93.946 earlier in the day. The dollar index last stood at 93.453.
U.S. GDP grew at 2.6 percent in the second quarter, according to the Commerce Department's advanced estimate released Friday. While the reading met expectations, the 1.9 percent growth recorded in the first half of the year suggested it was unlikely that full-year growth would exceed 2.5 percent, Reuters said.
Meanwhile, Japan June industrial production numbers released Monday reflected a rise of 1.6 percent on month, compared to a Reuters estimate of 1.7 percent. The metric recorded a 3.6 percent fall in the month of May, Reuters reported.
The Japanese currency strengthened slightly against the dollar following the news, trading as little as 110.45 to the dollar after the release compared to around 110.5 seen before. The greenback fetched 110.66 yen at 2:57 p.m. HK/SIN.
Markets also kept an eye on geopolitical developments in the Korean peninsula after North Korea test launched a projectile on Friday. In response, the U.S. flew two B-1B bombers over the peninsula and urged countries in the region to do more to tackle the issue.
South Korean retailers were a mixed picture following the heightened tensions: Lotte Himart closed higher by 4.66 percent, but Shinsegae and Hyundai Department Store fell 1.45 percent and 1.77 percent, respectively. Shares of Lotte Shopping closed down 8.52 percent after falling more than 10 percent earlier in the session.
The company was downgraded by Nomura to "neutral" from "buy" in a July 29 note. Nomura analysts Cara Song and Jiun Im cited a larger-than-expected THAAD impact on the retailer's hypermarket business in China. Lotte Shopping's domestic retail business were also lackluster even after store renovations were carried out, Song and Im said.
Gold traded at its highest levels in almost 7 weeks on the back of geopolitical tensions in the Korean Peninsula and political risk after elections in Venezuela. The yellow metal is often regarded as a safe haven during periods of political uncertainty. Spot gold traded at $1,266.46 an ounce at 3:30 p.m. HK/SIN.
"Venezuela will loom as the main event risk over the next 24 hours, as ... (the) violence-marred election over the weekend appears to be hastening the march to the bankruptcy of the country with the world's largest proven oil reserves," OANDA senior market analyst Jeffrey Halley said in a Monday note.
In corporate news, Hutchison Telecommunications Hong Kong Holdings announced Sunday it would sell its fixed-line business to private equity firm I Squared Capital for $1.9 billion, Reuters reported. Hutchison Telecommunications stock were up 8.54 percent at 2:47 p.m. HK/SIN, after soaring more than 13 percent in early trade.
On the earnings front, HSBC announced a $2 billion share buyback for the second half of the year. In addition, HSBC's first-half pre-tax profit of $10.24 billion beat the $9.5 billion average analyst forecast. HSBC shares listed in Hong Kong rose 2.75 percent on the news.
Japan Airlines reported after the market close that first-quarter earnings increased 12 percent on year to 24.7 billion yen ($223.4 million). The airline also revised upwards its earnings forecast for the year to 153 billion yen from 142 billion yen. Japan Airlines stock was off 0.61 percent at the end of the session.
Mizuho Financial Group also announced quarterly earnings after the market close. The company announced a 10.8 percent drop in net profits in its first quarter, Reuters said. Net profits stood at 118.3 billion yen ($1.07 billion) for the April to June quarter.
Results from Japan's Panasonic are also expected.
Stocks closed mixed on Wall Street Friday as markets saw a fall in Amazon.com stock after the company missed on earnings. The S&P 500 edged down 0.13 percent, or 3.32 points, to close at 2,742.10 and the Nasdaq slid 0.12 percent, or 7.51 points, to end at 6,374.68. The Dow Jones industrial average bucked the trend to rise 0.15 percent, or 33.76 points, finishing the session at 21,830.31.
— CNBC's Huileng Tan contributed to this report.