Asian market news: Will August retain July's heat?

Asian stocks have closed the books on a July that ran fairly hot, and not just with respect to temperatures.

For the month, China's CSI 300 (.CSI300) and the Hang Seng (.HSI) advanced 4.5% and 6.1%, respectively, notching their largest monthly percentage gains since January.

MSCI's index of Asia Pacific shares outside of Japan (.MIAPJ0000PUS) also logged its best upside performance in six months, rising 5.3%.

Japan's Nikkei 225 (.N225) was the outlier, ending the month essentially unchanged.

On Monday, market participants looked past China's weak factory and services data, focusing instead on Beijing's new measures to stimulate consumption and jumpstart what has so far been a lackadaisical post-COVID demand recovery.

Japan's Nikkei 225 (.N225) reached a four-week high while the benchmark Japanese government bond yield touched its highest level in nine years, as the Bank of Japan's first tentative step away from its ultra-easy monetary policy continues to reverberate.

On Tuesday, Australia's central bank is expected to follow in the footsteps of its global peers by hiking its policy rate by 25 basis points.

In the United States, all three major stock indexes followed Asia's example by posting modest gains, which could embolden Asian stocks to extend the rally as the calendar rolls over to August.

Before Wall Street's opening bell on Tuesday, heavy equipment maker Caterpillar Inc's (CAT.N) results will be scanned for clues on the global demand outlook.

U.S. data expected on Tuesday includes the Institute for Supply Management's (ISM) manufacturing PMI print for July, and the Labor Department's Job Openings report for June.

Both reports should provide further clarity on the effects of the Federal Reserve's restrictive monetary policy on the world's largest economy.