European markets gained in the opening minutes of trade as EU leaders manage to strike a deal on the bloc's next budget and China posted improved trade data.

The pan-European FTSEurofirst 300 index gained 0.4 percent to 1,152.29.

The UK's FTSE 100 gained 0.5 percent while Germany's DAX rose 0.3 percent. France's CAC-40 added 0.4 percent.

Italy's FTSE MIB and Spain's Ibex were up 0.1 percent respectively.

The single currency picked up against the dollar, trading at about $1.33.

The stage was set for a positive start after Asian markets closed higher, boosted by Chinese economic optimism ahead of a festival holiday next week.

The Shanghai Composite Index climbed 0.57 percent to 2432.40 while Hong Kong's Hang Seng was up 0.13 percent to 23208.06 towards close. Australia's S&P/ASX added 0.72 percent to 4971.30.

Japanese benchmark Nikkei dropped 1.80 percent to 11153.16 after the recent rallies. South Korea's KOSPI ended 0.99 percent higher at 1950.90.

Chinese economic prospects received another boost after the country's trade figures beat estimates and inflation rates matched forecasts.

Official data showed that shipments from the world's second largest economy jumped 25 percent in January while imports accelerated 28.8 percent. Although the data is likely to be distorted by the seasonal adjustments in the Chinese New Year festival, analysts remain positive that the strong numbers indicate the underlying economic strength.

"China's January trade data came in stronger than the market expected, in line with the port throughput performance," said analysts from ANZ.

"Although the Chinese New Year effects may have boosted the trade performance in January somewhat, we believe that the data also confirm our views that China's economy continues to gain momentum".

Separate data from Beijing's National Bureau of Statistics showed that consumer prices rose 2 percent year-on-year in January, easing from the 2.5 percent in the previous month and meeting analysts' expectations. But analysts suggest these figures are affected by the festival season and CPI could climb as much as 3 percent in February.

Meanwhile, the European Union leaders have managed to reach a consensus on the first budget reduction in the bloc's history. The deal's details are set to be revealed later in the day but reports suggest that following marathon negotations between the pro-austerity countries and struggling economies, leaders have set the ceiling at €960bn (£818bn/$1.29tn).

Japanese stocks remained weak after the recent yen-boosted rallies that took the benchmark index to a multi-year high, as ECB president Mario Draghi's eurozone comments and domestic corporate earnings weighed on investor confidence. The yen strengthened from its recent depths against the dollar, which traded at about 93.30yen during the day.

Meanwhile, official data showed that Japan's annual current account surplus remained weakest in years in 2012 as exports dwindled and energy imports firmed.

Elsewhere in Asia, the Reserve Bank of Australia has slashed its growth estimates from 2.75 percent to 2.5 percent for the current year, citing weakness outside the mining sector and a soft labour market.

Economic figures set for release during the day include German trade figures and UK construction output.