The HSBC flash China manufacturing PMI rose to a five-month high in July.
The rise was driven up by a jump in the output sub-index and signs of an improvement in new export orders that offered some relief to fragile markets.
Asian shares erased earlier losses while oil and copper rose after the Chinese data, pushing the commodity-linked Australian dollar up to $1.0288 from around $1.0265.
"China's PMI data beat market expectations and gave shorts a reason to cover today," said Orient Futures derivatives director Andy Du, referring to buying by short-sellers to realise their gains on earlier bets that markets would fall.
It was the first significant Chinese data in the third quarter and signalled that pro-growth government policies may be gaining traction in the world's second-largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2%, after spending most of the session in negative territory. It tumbled 2.4% on Monday for its biggest one-day drop in about two months.
Japan's Nikkei stock average also steadied after earlier slipping to a six-week low.
Brent crude rose 0.8% to $104.03 a barrel and U.S. crude added 0.8% to $88.81, while copper jumped 1.1% to $7,485 per tonne on China's PMI.
"The data gave a slight boost to markets, but whether such effects are sustainable are doubtful as Europe struggles with its problems," said Hiroyuki Kikukawa, general manager at trading company Nihon Unicom.
"Government policies will underpin the Chinese economy over the longer term, but in the short-term, instability in the European situation will keep a drag, especially as Europe is a big export market for China," he said.
European stocks were seen mixed and U.S. stock futures were barely changed.
Hong Kong's stock market opened up 0.1 percent after the morning session was cancelled due to Typhoon Vicente.
