Asian markets rose Monday as investors cheered data showing a surprise jump in Chinese factory activity, while oil prices bounced from last week's sharp losses after Iraq said top producers could announce a cut in output this week.

But while the week started on a positive note, worries about the trade talks were revived by China's Global Times newspaper saying Beijing wanted all US tariffs rolled back as part of a mini deal, a move observers said Washington is unlikely to agree to.

China said on Saturday that its manufacturing sector expanded in November for the first time in seven months, providing a much-needed boost to investors looking for signs of optimism in the world's number-two economy.

The news comes as Beijing and Washington put the final touches to a partial trade deal, the expected passage of which has helped global markets rally for weeks.

"This improvement in the manufacturing (purchasing managers index) is important because we can say with more certainty than at the beginning of the year that China's macro outlook is indeed stabilising," Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management, told Bloomberg News.

"A phase one-related pause, which seems to be around the corner, could herald the end of further, scheduled tariff hikes and the rollback of those imposed in September."

In early trade, Hong Kong and Shanghai both rose 0.4 per cent, while Sydney added 0.5 per cent and Seoul gained 0.3 per cent.

Tokyo ended the morning more than one percent higher, Singapore added 0.1 per cent and Wellington was up 0.2 per cent with Jakarta and Manila also rising.

'Very bitter trade pill' 
However, analysts raised concerns about an article in the Communist Party-linked Global Times, which tweeted that the government wants levies imposed on China to be removed as the US talks continue. It also said leaders wanted tariffs lined up for 15 December to be taken off the table.

But OANDA senior market analyst Jeffrey Halley said: "It is hard to see the US swallowing a very bitter trade pill like that; it would, in effect, remove all of the US's leverage in the far more difficult comprehensive trade negotiations to come."

"It is now becoming more apparent why the talks have dragged on so long."

Markets remain on alert over the trade friction after Beijing threatened unspecified retaliation for Donald Trump's decision to sign a law supporting Hong Kong pro-democracy protesters.

On oil markets, both main contracts rallied in morning trade after Iraq said on Sunday that OPEC and other major producers would consider slashing output by 400,000 barrels a day to support prices when they meet in Vienna this week.

The gains chipped away at some of the huge losses suffered Friday after reports said Russia was looking to delay any further output reductions until April's gathering.

But AxiTrader's Stephen Innes said that while the headline figure "might provide some initial price support, it might not be a huge swing factor since Russia at this time seems set against (a cut) in favour of stricter compliance".

- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 1.1 per cent at 23,551.88 (break)

Hong Kong - Hang Seng: UP 0.4 per cent at 26,443.47

Shanghai - Composite: UP 0.4 per cent at 2,883.60

Euro/dollar: UP at $1.1018 from $1.1017 late Friday

Pound/dollar: DOWN at $1.2914 from $1.2933

Euro/pound: UP at 85.32 pence from 85.18 pence

Dollar/yen: DOWN at 109.70 yen from 109.47

West Texas Intermediate: UP 99 cents at $56.16 per barrel

Brent North Sea crude: UP 83 cents at $61.32 (new contract)

New York - Dow: DOWN 0.4 per cent at 28,051.41 (close)

London - FTSE 100: DOWN 0.9 per cent at 7,346.53 (close)