Asian markets traded mostly higher, but Hong Kong and Shanghai saw their early gains reduced after data showed Chinese manufacturing activity remained in contraction. But the reading was very positive for things to come.

The markets were reacting to US economic data that showed an unexpected drop in unemployment, and an overall positive growth and improvement in the American Economy. Whereas Europe was rejoicing over successful bond sales in France, Spain and the UK.

Also more positive news came from the IMF, who said that they would be discussing increasing their funding to 1 trillion euros at their meeting in February and they also sought and received approval to begin conversations with Greece in some sort of a rescue package, other then what was previously agreed upon. More rumor then fact, news emerged that Greece had reached a better understanding with creditors and that they would have a final agreement shortly.

It seemed like the positive news and data outweighed the negative yesterday, sending markets climbing and the euro soaring reaching 1.2961.

Japan's Nikkei closed up 1.3%, while and South Korea's Kospi improved 0.8%, and Australia's S&P/ASX 200 index added on 0.3%.

Hong Kong's Hang Seng as it prepared to close for Lunar New Year opened up more than 1% break the psychological 20,000 level, but then petered out after the manufacturing data was up just 0.2% at 19,978.45.

The flash China manufacturing Purchasing Managers' Index for January reported in at 48.8, up from a final reading of 48.7 last month. The flash PMI reading however represented a three-month high, Despite the upside surprise of industrial production growth in December, the ongoing slowdown of investment and exports implies more headwinds to growth and likely destocking pressures for manufacturers in the coming months. The silver lining in the cloud was in the PMI subcomponents, where data for manufacturing output showed conditions were contracting at an accelerating pace, while new orders were contracting at a slower clip. With a slower contraction in new orders, the next report should reflect this is output, meaning that China's manufacturing show rate in a more positive light next month. This also indicates the global economy is getting healthier. The positive news from the flash report indicated that new export orders were among the few bright spots, with conditions expanding, changing direction from contraction indicated last month. In all the report is a positive sign of things to come.

Financial firms were pushed up amid global optimism and gains for U.S. counterparts overnight.

Hang Seng Index HSBC Holdings PLC increased 2.9% in Hong Kong.

Mitsubishi UFJ Financial Group Inc. jumped 5.1%; Daiwa Securities Group Inc. climbed 4.7%, among others.

All in all today's Asian session was very positive and should give a push the EU markets, and investors' appetites.

Chinese markets will be closed for the Lunar New Year.


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