Asian markets are expected to begin the week on the upswing gains after leaders of the European Union agreed on action to stem the region's debt crisis.

The markets ended last week on a positive note after EU leaders agreed to create a single euro zone banking supervisory body and let rescue funds be sent directly to the struggling banks, instead of adding to the public debt of their national governments.

Market participants are likely to turn their attention to the U.S. and Europe as economic reports are to be released in the coming week, including manufacturing PMIs and the U.S. non-farm payrolls and unemployment data for the month of June.

The U.S. Department of Labor's monthly non-farm payrolls report, which is the most closely watched economic statement pertaining to the job market and a key gauge for the direction and pace of the economic recovery, will be released Friday. Economists polled by Reuters expect a rise of 100,000 jobs last month, an improvement over the gain of 69,000 jobs in May, while the unemployment rate is expected to remain at 8.2 percent.

In Asia, market participants are likely to focus on economic releases including manufacturing PMIs from China, India, Singapore and South Korea to understand the growth momentum in the emerging economies. Data from China in particular will set the tone for regional market mood, and the news is likely to disappoint investors.

The emerging market (EM) data flow will likely confirm the relative weakness of the emerging market economic momentum. The PMIs due this week in a bunch of large EMs will likely soften on average. The outcome of the EU summit and the ECB agenda will potentially remain the main market movers, said a note from Credit Agricole. 

China's official manufacturing and services PMIs for the month of June are likely to disappoint and will revive fears of a deeper slowdown in the world's second-largest economy. The official manufacturing PMI is expected to ease to below 50 levels from 50.4 in May, suggesting a continuous weakness in the economic growth in the world's largest emerging market and will set a bearish tone for later data.

Analysts at Credit Agricole expect that the poor readings could also accelerate further policy-easing measures, with another RRR cut increasingly likely in July.

In early June, the HSBS preliminary manufacturing survey showed that Chinese manufacturing activity continued to contract for the eighth straight month. The HSBC Flash Purchasing Managers Index (PMI), a measure of the nationwide manufacturing, declined to 48.1 in June from 48.4 in May, raising concerns about the weak global demand and diminishing real estate investment in the world's second largest economy.

In India, the Finance Ministry's decision not to apply the retrospective taxing provisions in general anti-avoidance rules (GAAR) for merger and acquisition deals boosted investor sentiment, leading to strong foreign fund flows to the equity market and helped markets end the week on a high note. The positive momentum is expected to continue this week.

Meanwhile, Morgan Stanley has upgraded Indian stocks to equalweight in its latest report after having rated them underweight since the first quarter of 2011. JPMorgan and Deutsche Bank also upgraded Indian markets to overweight from neutral recently, despite acknowledging the risk factors facing the economy.

The government is planning to set the ball rolling by allowing 51 percent foreign direct investment (FDI) in multi-brand retail once the presidential poll is concluded this month. Officials say the Indian government has completed all the pertinent meetings with stakeholders, including the states, and the decision has already been approved by the union cabinet; only the notification part remains, Business Standard reported.

Meanwhile, the telecoms department will formally impose this week penalties totaling 15.94 billion rupees on five mobile phone firms, Bharti Airtel, Idea Cellular, Vodafone India, Tata Teleservices, Tata Communications and Reliance Communications, the Economic Times reported, citing officials in the department.

Stocks in South Korea are expected to report gains this week, following the European Union leaders' decision to lower the borrowing costs of Italy and Spain and create a single supervisory body for euro banks. June inflation is expected to remain at 2.5 percent on annual basis.