Asia stocks higher on positive U.S., Europe data

Asian stock markets moved higher on Tuesday as upbeat economic data from the U.S. and Europe lifted investor confidence ahead of the Federal Reserve's policy meeting.

The region took its lead from strong overnight gains in the U.S. and Europe, as stocks responded well to signs of improvement in the global economy. In Europe, markets surged after preliminary data showed that manufacturing in the euro zone grew at its fastest rate in December since May 2011.

Shutterstock Enlarge Image

The European data followed figures for China from earlier on Monday, which showed slowing growth in factory activity in Asia's largest economy in December — a contributor to the region's declines in the previous session.

Top Warren Buffett Companies To Buy For 2014

In the U.S., industrial production in November exceeded its pre-recession peak, prompting a 0.8% climb in the Dow Jones Industrial Average. The data came just before the Federal Reserve starts its much-anticipated policy meeting on Tuesday, where there are some expectations that the central bank could start to withdraw its stimulus when it concludes on Wednesday — a process that has become known as tapering.

The positive sentiment in Asia was evident in the yen. Although the dollar (USDJPY)   lost 0.2% overnight against its Japanese counterpart, it did manage to climb back above the ¥103 mark, which it lost in Asian trading on Monday. The yen recently traded at ¥103.05 to the dollar.

The softer local currency helped Japanese stocks rebound after Monday's selloff, with the Nikkei (JP:NIK)  up 1%.

South Korea's Kospi (KR:SEU)   was up 0.9% and Australia's S&P/ASX 200 (AU:ASX)  gained 0.5%.

In China, Hong Kong's Hang Seng Index (HK:HSI)  rose 0.4% and the Shanghai Composite (CN:SHCOMP)   was up 0.1% in the mainland.

The Australian dollar rose after minutes from the Reserve Bank of Australia's December meeting showed that the central bank was prudent to keep rates steady to gauge the effect of previous cuts, though it did say that the Australian dollar was "uncomfortably high".

The Aussie (AUDUSD)  moved as high as 89.54 U.S. cents from 89.33 U.S. cents before the minutes were released, and was last at 89.47 U.S. cents.