Stocks shook off concerns regarding the Italian political situation and finished up as the markets showed optimism of advances in US budget talks.

Overseas, Italian prime minister Mario Monti unexpectedly announced that he will resign from his position after the approval of a 2013 budget for Italy. This move will force the country to conduct elections sooner than expected, likely in February, and it has raised speculation that former Italian prime minister Silvio Berlusconi will regain the position following the elections. Worries about political instability in the country sent Italian bond prices lower and contributed to a rise in U.S. Treasuries.

Meanwhile, the November employment trends index dropped slightly from its October reading, countering the better-than-expected payrolls data reported last Friday. The weaker trends reading points to slowing job growth in the near term.

Honeywell International (HON) announced it will purchase Intermec (IN) in a deal valued near $600 million that will allow the former firm to expand its mobile computing capabilities. The acquisition will also affect Honeywell's full-year results, however, as the firm now forecasts its earnings per share and revenue numbers for the year to be in line with or lower than Wall Street expectations.

McDonald's (MCD) posted a 2.4% gain in global comparable-restaurant sales last month. The reading brought sales back into positive territory after the drop in such sales in October. It was also well higher than the 0.17% expected increase. The fast-foot giant saw improvement in most of its major global regions.

Movement in the US fixed income market was lacklustre as a lack of economic data meant traders had nothing to act on. At 7:45 AM (AEST), the 10-year Treasury note yield was 1.61% and the 5-year yield was 0.62%.

For Australian ADRs listed on the NYSE, BHP Billiton strengthened 91 cents (1.25%) to $73.83, ResMed improved 1 cents (0.02%) to $41.54, Telstra Corporation increased 8 cents (0.37%) to $22.90, Telecom Corporation of NZ fell 4 cents (0.43%) to $9.36 and Westpac rose $1.02 (0.76%) to $135.95.

Both the FTSE 100 and FTSE 250 indices registered very little movement either into positive or negative territory on Monday. The FTSE 100 edged up by 7 points, or 0.1%, to close at 5,922. The FTSE 250 lost 9 point, or 0.1%, to close at 12,178.

On the FTSE 100 index, stocks generally stayed within a narrow trading range. There were no extreme winners or losers by the close of the day. Shares in Smith & Nephew (SN.) rose by nearly 2%, making it the biggest gainer on the large-cap index. Hargreaves Lansdown (HL.) registered the sharpest loss, with shares declining by 2.5%.

Standard Chartered (STAN) confirmed late on Monday afternoon that it would pay an additional $327 million in fines after US regulators accused the bank of violating sanctions with Iran. This second payment is in addition to an earlier payment of $340 million related to the Iranian incidents. These fines were in line with recently released estimates from the bank. Shares in the global bank plummeted in August when regulators publicly accused StanChart of past dealings with Iran.

Meanwhile, on the FTSE 250 index, shares in the high-street bakery chain Greggs (GRG) fell by 3% after the company announced that CEO Ken McMeikan will be leaving the company to take up the CEO role at the privately owned Brakes Group.

McMeikan was the "architect of a material modernisation of Greggs including the development of a more efficient supply chain and a more fit-for-purpose and competitive retail estate," stated Shore Capital analysts Clive Black and Darren Shirley in a research report. "We cannot hide our disappointment for Greggs' shareholders on the announcement of Mr. McMeikan's resignation."

On the FTSE, Rio Tinto firmed 21.50 pence (0.66%) to 3,279.98 pence and BHP Billiton firmed 3.50 pence (0.17%) to 2,018.21 pence.

Asian markets started the week on a positive note Monday after upbeat data from the US boosted investor confidence.

Chinese stocks led gains in the region, with the Shanghai Composite ending up 1.1% and the Hang Seng adding 0.4%. Elsewhere, the Nikkei and the S&P/ASX All Ordinaries edged up 0.1% each while the Sensex finished 0.1% lower.

Trading started on a positive note after weekend reports showed Chinese industrial output in November increased 10.1% over the same month a year ago to its highest level since March.

A positive finish for Wall Street equities on Friday also lent support after the US Labor Department reported better-than-expected employment numbers in November, though consumer sentiment dropped.

The upbeat mood also helped investors ignore some disappointing data from China. China's export and import growth rates declined during November, with the monthly trade surplus contracting sharply to $19.6 billion.

The Japanese cabinet office, meanwhile, said the country's gross domestic product shrank by 0.9% during July-September quarter, at the same rate as the previous quarter. Economists were expecting the economy to contract a slightly lesser 0.8% in the third quarter.

Stocks in Japan pared early gains after the release of GDP data, as the dollar gained strength against the Japanese currency. Currency-sensitive firms moved mostly lower on heels of the GDP numbers. Among notable losers, Sharp Corp. tumbled more than 5.6%, Toshiba Corp. erased 2.1% while Nintendo Co. Fell 4.4%.

Some exporters, however, moved against the tide, offsetting some of the losses on the benchmark index. Advantest Corp. jumped 4% and Komatsu gained 0.3%.

Steel players climbed modestly higher. Kobe Steel added 1.3% and Mitsubishi Materials rose over 3.5%. In Hong Kong, airline stocks moved higher with Air China bouncing 7.5% and Chin a Eastern Airlines gaining 5.5%.

Some property developers also found support. Poly Property Group added 0.9% while China Overseas Land & Investment improved 2.1%. Metal-linked players notched higher, tracking gains in commodities after signs of improvement in China boosted demand for riskier assets. Angang Steel rose over 2% and Aluminum Corp. of China rose 1.5%. Banks, too, were in the green. The country's largest lender, ICBC rose 1.3%, while Agricultural Bank of China moved 1.7% higher. Bank of China improved 1.2%.

In Mumbai, stocks retreated from early highs towards the end of the session, weighed down by weakness in European bourses. Among IT stocks, TCS dropped 2.5% while Infosys lost 0.4%. Wipro ended up 0.6% after the IT-services giant said it will acquire Singapore based L.D. Waxson Group for around $144 million. Among other gainers were pharma stocks -- Dr. Reddys Lab rose 2.5%, Cipla gained 1.7% and Sun Pharma 1.1%. But retailers slumped after posting sharp rally in recent sessions as investors booked profits. Pantaloon Ltd plunged over 5%, and Shoppers Stop tumbled 4.7% and Trent Ltd. fell 3%.

In Sydney, miners led the field following better economic indicators in the US. Diversified iron-ore miner Fortescue Metals Group soared nearly 7% after reports said the company sold 25% of its Nullagine mine to BC Iron for 190 million Australian dollars. Index heavyweight BHP Billiton was up around 1% while fellow miner Rio Tinto moved up almost 2%. Other notable performers included surfwear retailer Billabong International, which added 3.5%, Linc Energy, up 10% and gold producer Alacer Gold Corp., up 3.2%.