Building the hands was not very easy and I was told that I should probably make a lot, because they wear out fairly quickly as it is the part of the puppet you use the most.
I followed the instructions of the armature I got from animation supplies. Use very thin metal wire and put it together as shown in the picture below (left). Next I added some plastic tubes which shrinks when heated (picture to the right). I used a small metal plate to put the metal hands on and placed that not a pot with water and heated it. It takes about 5 minutes.
When the heat shrink had set I let them cool down. As soon as they were cool I started sculpting the hands. I used sculpy mold which is a clay you use when you want to make a mold, the good thing about this clay is that you put it in the oven and when it's done it keeps the shape when you bend it. Like silicon but less good. For the hands it's important to add a thin layer of the clay and make sure there are no cracks in it otherwise it will break when backed. The backing is very simple: set the oven to 160 C and give it 5-6 min. it's a matter of testing it. If you give it too much it get very quickly dry.