GLOBAL MARKETS: Asian stocks climb following Wall Street gains

SINGAPORE — Asian stock markets posted modest gains at the start of Tuesday's trading as investors tracked a global rally, while oil prices steadied near their lowest levels in weeks as the U.S.-Iran conflict remained at a stalemate.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1%, led by South Korean stocks, which climbed as much as 2.1%. Japan's Nikkei 225 slipped 0.3%, while S&P 500 e-mini futures rose 0.1%.

Investor sentiment improved after U.S. manufacturing activity expanded in July to its highest level in more than four years, helping lift the Dow Jones Industrial Average to a record closing high overnight.

Chris Weston, head of research at Pepperstone Group in Melbourne, said risk assets appeared to have regained momentum, adding that positive sentiment from European and U.S. markets could continue to support regional equities.

Oil prices recovered slightly during Asian trading. Brent crude rose 0.6% to $84.29 per barrel after falling to a three-week low on Monday. The decline followed remarks by U.S. President Donald Trump, who said he had postponed a planned attack on Iran as a gesture of goodwill during peace efforts. Iran, however, denied that any negotiations were underway.

In currency markets, the U.S. dollar gained 0.3% against the Japanese yen to 157.625, recovering after coordinated intervention by U.S. and Japanese authorities last week to support the yen.

The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, remained near its lowest level in about two months at 99.99.

Meanwhile, the yield on the benchmark 10-year U.S. Treasury note inched up 0.2 basis point to 4.684%.

Markets continue to expect the Federal Reserve to raise interest rates at its September meeting. According to CME Group's FedWatch tool, futures markets indicate a 65% probability of a 25-basis-point rate hike at the U.S. central bank's meeting ending on Sept. 16.

Federal Reserve Bank of New York President John Williams said he remained optimistic that inflation would continue to ease gradually but reiterated that the Fed stands ready to raise interest rates if inflation does not slow as expected.

In the cryptocurrency market, bitcoin fell 0.5% to $63,446.35, while ether also declined 0.5% to $1,857.44. -Reporting by Gregor Stuart HunterEditing by Shri Navaratnam/Reuters