U.S. markets were closed for a public holiday on Monday.

Europe's stock indices followed Asian stocks and traded higher. Speculation the European Central Bank (ECB) will add further stimulus measures and better-than-expected ZEW economic sentiment index from the Eurozone supports European stocks.

UK's FTSE 100 index was up 0.33% to 6,607.38 points. Germany's DAX 30 increased 0.23% to 10,265.55 points, while France's CAC 40 rose 0.74% to 4,427.33.

Analysts expect that the ECB President Mario Draghi will announce on Thursday a 550 billion-euro bond-buying programme.

Germany's ZEW economic sentiment index increased to 48.4 in January from 34.9 in December, exceeding expectations for a rise to 40.1.

Eurozone's ZEW economic sentiment index rose to 45.2 in January from 31.8 in December, beating expectations for a gain to 37.6.

Hong Kong's Hang Seng increased 0.90% to 23,951.16, China's Shanghai Composite rose 1.85% to 3,173.93. Asian stocks benefited from Chinese economic data. Chinese economic data weighed on the kiwi. Chinese gross domestic product (GDP) rose by 7.3% in the fourth quarter, beating forecasts of a 7.2% gain, after a 7.3% increase in the third quarter.

China's economy expanded 7.4% in 2014 (2013: +7.7%), the slowest growth since 1990.

China's industrial production climbed 7.9% in December, exceeding expectations for a 7.4% increase, after a 7.2% gain in November.

Japan's Nikkei gained 2.07% to 17,366.3 due to a weaker yen and better-than-expected Chinese GDP. The yen weakened against the greenback ahead of policy meetings at the Bank of Japan and the ECB.