Japan and China remained closed, and other markets observing truncated hours on first trading day of 2009.

Stocks climbed 4.6% in Hong Kong, 5.0% in Sri Lanka, 3.3% in South Korea, 2.0% in Malaysia, and 1.1% in Indonesia. Australia's bourse edged 0.2% lower.

In Europe, stocks are trading higher by 3.0% in Sweden, 1.9% in France, 1.7% in Germany, 1.4% in Italy, and 1.1% in Britain.

The dollar advanced 1.1% against sterling, 1.8% versus the Australian dollar, 0.7% against the kiwi, 0.6% against the yen, and 0.3% relative to the euro and Canadian dollar. The greenback weakened 0.6% against the Swiss franc, which benefited from less risk aversion.

Oil settled back 6.3% but remained above $40 at $41.77 per barrel. Gold slid 1.7% to $869.90 per ounce.

The Czech Republic assumed the EU Presidency, which rotates every six months. France previously held that title.

Euroland's manufacturing PMI in December was revised downward to 33.9 from 34.5 reported initially, 35.6 in November, 41.1 in October, 45.0 in September and 52.6 at the end of 2007. Orders were revised down a point to 26.4 and compared to 52.8 at end-2007. Among key Ezone members, PMI readings were 32.7 in Germany, 34.9 in France, 35.5 in Italy, 28.5 in Spain, 41.0 in Greece and 38.4 in the Netherlands. Evidence of a deepening downturn fanned speculation that the ECB will again cut rates on January 15th. Its refinancing rate currently stands at 2.5%.

Britain's manufacturing PMI rose 0.4 points to 34.9 and surpassed expectations. The U.K.'s Halifax house price index dropped 2.2% in December and by 16.2% from end-2007. The Bank of England reported November mortgage approvals of just 27K, smallest in at least ten years and down 13% from November. Net mortgage lending was 90.3% less than in November 2007. M4 growth accelerated to a 221-month high of 16.4% in the year to November from 15.3% in October.

Other reported Purchasing Manager Indices included 38.3 in Poland, 33.7 in Australia, 32.7 in Sweden, 41.2 in China, 33.8 in Russia, 44.4 in India, 32.7 in the Czech Republic, and 40.8 in Denmark. Readings below 50 signal contracting activity. The further beneath 50, the more sharply activity is falling.

The Reserve Bank of India cut its repo rate by 100 basis points to 5.5% from 6.5%. Reserve requirements will be reduced to 5.0% from 5.5% in an additional easing of monetary policy.

There will be a slew of horrific fourth-quarter GDP reports this month and next beginning with Singapore, which today announced that its gross domestic product tumbled at a 12.5% annualized rate after drops of 5.4% saar in 3Q and 5.3% in the second quarter. GDP fell 2.6% year-on-year after a 0.3% dip in the year to 3Q08.

South Korean exports and imports fell between December 2007 and December 2008 by 17.4% and 21.5%, more than expected.

On-year CPI inflation in Cyprus slowed sharply to 2.1% in December from 3.4% in November.

Hong Kong retail sales rose 1.1% in value terms in the year to November but dropped 2.8% on a volume basis.

The Institute of Supply Management will release U.S. manufacturing PMI readings at 15:00 GMT.