Investors were bolstered by stronger-than-expected PMI data from China and India. Stocks advanced with the MSCI Asia Pacific ex-Japan Index gaining more than +1%. In the commodity sector, oil and gold rose as driven by improved market sentiment. Currently trading at 100.25, the front-month contract for WTI crude oil climbed above 100 again in Asian session today after plunging to as low as 98.61 Monday while the equivalent Brent crude contract rebounded to 108.5. Gold price rose for a second day amid geopolitical concerns. The nuclear project in Iran has raised fears in the market.

The Chinese PMI Manufacturing index climbed +1.3 points to 50.3 in December, signaling a return of the country's manufacturing sector to expansion. Improvement across the components was also broadly based. Details suggested that the slowdown in domestic demand has stabilized with 'new order' gaining +0.9 points to 49.5 and 'new export order' rising to 49.4 from 47.1 in November. Meanwhile, the 'overstock order' gained modestly to 46.0 in December from 45.7 in November. Note that these 3 readings remained in contraction but the improvements signaled stabilization in domestic demand.

According to the report by HSBC and Markit, India's PMI added +3.2 points to 54.2 in December. The improvement indicated that the country's economic outlook should not be as weak as GDP and IP data had suggested. As stated in the HSBC report, the data brought 'some relief with regards to growth' as 'domestic demand is providing solid support for activity on the ground. Moreover, the rise in overseas orders suggests that conditions for export oriented industries are maybe not quite as dire as feared'. Yet, the central bank of India would continue to reverse monetary tightening implemented since March 2010 to stimulate growth.

Precious metals shot higher after reports of Iran's production of its first nuclear fuel rod.The Iranian Students News Agency cited the country's atomic energy agency that a domestically made rod was inserted into the core of Tehran's atomic research reactor after performance tests. The move is expected to intensify tensions between Iran and the US and allies.

Concerning the dataflow today, PMI data in the UK might have slipped -0.3 points to 47.3. In the US, the ISM manufacturing data probably climbed +0.5% points to 53.2 in December. Construction spending in the country probably rose +0.5% m/m in November, easing from +0.8% a month ago.