Asian markets rose in the week as investor sentiment was lifted with China's manufacturing and service activity expanding in November, giving the indication that the world’s second-largest economy is reviving its growth momentum.

Hong Kong's Hang Seng Index rose 0.7 percent and closed at 22191.17 while China's Shanghai Composite Index gained 4.1 percent and closed at 2061.79.

China's manufacturing activity expanded to a thirteen-month high in November, according to the HSBC Purchasing Managers’ Index (PMI) released Monday. The final reading of the PMI, a measure of the nationwide manufacturing activity, rose to 50.5 in November compared to 49.5 in October. Significantly, the index moved into the expansion zone, a reading above 50.

China's service activity expanded in November but at a slower pace compared to that in the previous month, according to the HSBC Services PMI released Wednesday. The reading of the Services PMI, a measure of the nationwide service activity, rose to 52.1 in November compared to 53.5 in October.

Investor sentiment was also supported by optimism in the U.S. on avoiding the fiscal cliff, consisting of tax rises and spending cuts, at the beginning of next year. Market players were expecting that U.S. President Barack Obama and the congressional leaders were making advances toward reaching an agreement to avert the fiscal cliff.

Japan's Nikkei 225 Stock Average gained 0.9 percent and closed at 9527.39.  South Korea's Kospi Index rose 1.3 percent and closed at 1957.45.

Japan's monetary base rose in November compared to that in the same month last year, indicating that the monetary easing policies were leading to an increase in the amount of currency in circulation which in turn results in reviving the economic growth.

According to the data released Tuesday by the Bank of Japan, the country’s monetary base, which measures the change in the total amount of domestic currency in circulation and current account deposits held at the central bank, advanced 5 percent in November, down from a 10.8 percent rise in October.

Japan’s service activity expanded in November, indicating that there was hope for a rise in new business and a general improvement in the country’s economic climate. According to the data released Wednesday by Markit, Services PMI rose to 51.4 in November compared to 50 in October.

South Korea’s manufacturing activity continued to contract in November but improved to a five-month high, according to the HSBC PMI released Monday. The reading of the PMI rose to 48.2 in November compared to 47.4 in October. The index remained in the contraction zone, a reading below 50.

South Korea's economic growth slowed to 0.1 percent in the third quarter of this year compared to that in the previous quarter, weighed down by the faltering global economy and the intensifying debt crisis in the euro zone, the revised data released by the Bank of Korea (BoK) Thursday showed. The economy expanded 0.3 percent in the second quarter while it rose 0.9 percent in the first quarter.

India's BSE Sensex was up 0.4 percent and closed at 19424.10. 

Investors were focusing on the crucial vote in the parliament on allowing 51 percent foreign investment in the retail sector. Market participants cheered Wednesday as a motion that sought withdrawal of FDI in multi-brand retail was defeated in the Lok Sabha. On Friday, the ruling coalition got the majority in the Rajya Sabha with the Bahujan Samaj Party supporting the government on FDI vote.

The outcome of this week’s proceedings is considered a major step to make sure that more economic reform policies can be introduced by the government to revive the growth momentum.

Meanwhile, investors faced some worries amid the revival of the concerns about the debt crisis affecting the euro zone. On Thursday, the European Central Bank gave the forecast that the euro zone economy would fall 0.5 percent this year and 0.3 percent in 2013.

Major gainers: Shares of Samsung Electronics Co advanced 5.3 percent. Shares of Tata Motors rose 2.75 percent and those of Honda Motor Co gained 1.2 percent.