The U.S. GDP report that is expected later in the session will be in the limelight. It could represent the final period of strong growth.

As trading resumed following the three-day Lunar New Holiday, Asian stocks reached a new seven-month high on Thursday, with Hong Kong shares catching up to other markets' advances.

The largest Asia-Pacific MSCI index is expected to post advances for a fifth straight day.

The index has risen 10% so far in January, supported by predictions that most major central banks would soon stop making significant rate increases as well as prospects of a robust economic recovery in China.

Due to Australia being closed for a vacation and some of Asia, including China, still being away for the Lunar New Year, trading was light on Thursday.

With the FTSE futures up 0.30% and the German DAX futures up 0.58%, the positive mood in Europe appeared ready to persist.

After the Bank of Canada on Wednesday boosted rates but became the first major central bank to declare it will likely hold off on additional rises for the time being, traders speculating that the U.S. Federal Reserve will soon scale down its aggressive rate hike programme saw a boost.

The U.S. central bank is now widely anticipated to raise rates by a lower 25 basis points next week on indications that inflation is slowing down after a series of extremely significant rate rises last year.

Although economists predict that the Fed will finally stop raising interest rates this year, others believe that the meeting in February is a little too soon for that to happen.

The U.S. GDP report that is expected later on Thursday will be in the limelight. The data could represent the final period of strong growth before the delayed effects of the Fed's massive rate rises become apparent.

According to experts at Saxo, "today's U.S. GDP announcement will be of vital importance to measure whether the market expectations are changing in favour of a soft landing, rather than a recession will that continue to hold."

Investor focus will also be on the upcoming meetings of the Bank of England and European Central Bank, with traders searching for hints as to when the central banks are likely to become dovish.

Finally, after less growth than forecasted in U.S. crude inventories, oil prices remained stable.

(investing.com, reuters.com)