Your code is missing <Triggers> and <ContentTemplate> tags. I wrote the following code on masterpage, and it is working just fine.
<form runat="server">
<asp:scriptmanager id="MasterScriptManager" runat="server" >
</asp:scriptmanager>
<asp:updatepanel id="UpdatePanel1" runat="server" xmlns:asp="#unknown">
<triggers>
<asp:asyncpostbacktrigger controlid="TimerTime" eventname="Tick" />
</triggers>
<contenttemplate>
<asp:label id="lblDateToday" runat="server" />
<asp:label id="lblTime" runat="server" />
<asp:timer id="TimerTime" runat="server" interval="2000" ontick="Tick">
</asp:timer>
</contenttemplate>
</asp:updatepanel>
</form>
Code behind:
protected void Tick(object sender, EventArgs e)
{
}