European markets

European stocks edged up in the early minutes of trade as investors considered the positive US earnings outlook ahead of the Fed's policy meet.

The UK's FTSE 100 rose 0.1 percent while Spain's IBEX, France's CAC-40 and Italy's FTSE MIB remained little changed.

In Germany, the DAX gained 0.1 percent. The FTSEurofirst 300 index covering the region's top shares rose 0.2 percent to 1,175.33.

The single currency eased moderately lower against the dollar, trading at about $1.34.

Asian markets had ended higher earlier as US and domestic earnings outlook and economic indicators boosted sentiments.

The Japanese benchmark Nikkei average closed 0.39 percent higher to 10866.72 while South Korea's KOSPI was up 0.84 percent to 1955.96. Australia's S&P/ASX 200 added 1.11 percent to 4889.00, opening after a long weekend.

In China, the Shanghai Composite Index gained 0.53 percent to 2358.98. Hong Kong's Hang Seng traded 0.01 percent higher to 23673.30 towards close.

Positive US fourth quarter corporate earnings and improved core durable goods orders cheered market sentiments, but it did bring concerns that the Fed could refrain from further monetary easing measures. After Internet giant Yahoo and earth-moving equipments maker Caterpillar reported earnings early this week, traders are now awaiting releases from majors such as Amazon and Ford.

Investors are also awaiting the Federal Reserve's policy meet, the country's initial fourth quarter gross domestic product (GDP) figures and monthly employment data expected this week.

Eurozone concerns saw a modest relief after European Union economy commissioner Olli Rehn said that Spain could ease its austerity plans if the economy continues to contract, hinting at allowing more room for the struggling country to meet its budget targets.

"We take into account the growth outlook and the fiscal space of each and every country when we make the assessment," Rehn told reporters, referring to a review of Spain's conditions due next month.

"If there has been a serious deterioration in the economy, we can propose an extension of the country's adjustment path".

Meanwhile, Greek Finance Minister Yannis Stournaras has said that Greece had survived the worst and that the possibility of a 'Grexit' is small, in an interview with BBC. But traders are expected to be cautious as Greece is in recession for the sixth straight year and has an unemployment rate of 26.8 percent.  

However, in a sign that things are improving regulators are reportedly lifting the short-selling ban on stocks, with the exception of banks. Spain too is expected to cancel its stocks and bonds short-selling ban.

Financial firms traded higher in Tokyo as a report from Nikkei daily suggested that the recent market surge could be beneficial to them. Recent stimulus measures from the Japanese government and policy changes from Bank of Japan had hiked investors' risk appetite, pushing the benchmark gauge to record highs.

The focus has also fallen on Japan's domestic earnings season, with major firms including camera maker Canon and automobile company Honda set to release quarterly earnings reports this week.

Elsewhere in Asia, sentiments were further boosted after a South Korean manufacturer's survey showed that business confidence for February rose to 72 from 70 for January.