MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent by mid-morning. Tokyo's Nikkei rose 0.4 percent, shaking off early weakness.
The MSCI index hit intraday highs after the June HSBC/Markit Flash China PMI showed China's factory sector activity expanded for the first time in six months, offering new signs the economy is stabilising thanks to Beijing's measures to shore up growth.
"This month's improvement is consistent with data suggesting that the authorities' mini-stimulus are filtering through to the real economy," said Qu Hongbin, chief economist for China at HSBC, referring to a series of measures announced by the government in recent months to spur activity.
"We expect policymakers to continue their current path of accommodative policy stance until the recovery is sustained," he added.
Risk sentiment was dampened earlier in the year when China reported an underwhelming run of data showing a cooling in investment, retail sales and factory output.
The Aussie, which closely tracks the economic performance of China, the Australia's top exporter, rallied on the stronger-than-expected Chinese factory survey.
The Australian dollar jumped more than a quarter of a cent to as high as $0.9431, edging towards a two-month peak of $0.9438 hit earlier in the month.
The dollar stood little changed at 102.04 yen after gaining modestly the previous session as U.S. Treasury yields rose.
The euro was also nearly flat at $1.3594.
In commodities, Brent crude rose 0.3 percent to $115.16 per barrel, not far off the nine-month high of $115.71 hit on Thursday.
Sunni militants took three towns in Iraq's western Anbar province on Sunday in a push to evict Iraqi security forces from Sunni Muslim areas, witnesses and security sources said.
The repercussion of higher oil prices were felt in other commodity markets, with copper reaching a three-week high as stronger crude set off a flurry of technical buying.
Three-month copper on the London Metal Exchange climbed 0.2 percent to $6,835.50 a tonne, after hitting $6,850 a tonne, its highest since June 4.
The escalating violence in Iraq and geopolitical tensions also kept safe-haven gold well bid. Spot gold was little changed at $1,313.36 an ounce, not too far from a two-month high of $1,321.90 hit on Friday.
The Dow and S&P 500 closed at record highs on Friday, helped by the prospect of the Federal Reserve keeping interest rates low for a long period of time.