Asian stock markets are trading higher on Tuesday after a strong finish to 2016 with a key indicator of China's private manufacturing sector's health ahead and a deal by Australia and New Zealand (ANZ) Banking Group catching attention.

China's benchmark index, Shanghai Composite went up 25.93 points or 0.84 percent to trade at 3,129.57. Hong Kong's Hang Seng gained 140.14 points or 0.64 percent to trade at 22,140.70. Singapore's Straits Times went up 6.59 points or 0.23 percent to trade at 2,887.35.

South Korea's KOSPI rose 10.07 points or 0.5 percent to trade at 2,036.23. Taiwan's TAIEX rose 13.55 points or 0.15 percent to trade at 9,267.05.

On the other hand, Japan's benchmark index, Nikkei 225 lost 30.77 points or 0.16 percent to trade at 19,114.37.