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Chinese shares suffer biggest weekly drop in 7 years

Mainland shares suffered a steep correction on Friday, underperforming other regional bourses which followed the lead from Wall Street to end higher.

Overnight, a dovish statement from the Federal Reserve helped U.S. stocks to finish about 1 percent higher, with the tech-heavy Nasdaq topping its intra-day high from March 2000.

However, concerns over Greece remained in the backdrop after Eurogroup finance ministers failed to reach a deal on Thursday. Negotiations between the debt-stricken country and its creditors will continue at a crisis summit next Monday.

Meanwhile, the Bank of Japan (BOJ) largely stuck to the script in its rates decision on Friday, maintaining its massive asset buying program which increases the money base at an annual pace of 80 trillion yen ($650 billion).

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NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Shanghai Comp tumbles 6.4%

China's Shanghai Composite index tumbled on the final trading day of the week to settle at its lowest level since May 29, while the blue-chip CSI 300 plummeted 6 percent.

For the week, both key indexes retreated more than 9 percent, marking their biggest weekly falls in seven years, according to Reuters. The slide was sparked by fresh tightening moves on margin lending by the China Securities Regulatory Commisiion (CSRC), as well as a deluge of initial public offerings (IPOs) that posed a huge threat to market liquidity.

"25 new listings are due to take place today [and] it was estimated that a record of 6.7 trillion yuan ($1.1 trillion) worth of funds is being locked up for subscription to these IPOs," IG market strategist Bernard Aw wrote in a note.

Read MoreChinese stocks suffer 'healthy correction'

"At this point, it may be difficult to tell if the correction will go deeper, but the large decline this week may actually be positive for Chinese stocks. Worries over high valuations of smaller-cap counters would be assuaged to some extent as the prices retreat. In addition, the looser monetary policy tone has not changed," he added.

Decliners were led by property and banking plays. Shanghai Shimao and Gemdale lost nearly 10 percent each, while heavyweight components Poly Real Estate and China Vanke eased 6.1 and 4.4 percent, respectively.

Agricultural Bank of China and China Construction Bank were among the biggest losers among financials, down more than 4 percent each.

ASX jumps 1.3%

Australia's S&P ASX 200 index recouped all of Thursday's 1.3 percent slump, thanks to stellar gains in the resources sector on the back of a dovish Federal Reserve and a weaker U.S. dollar.

As crude oil prices held on to overnight gains, Oil Search tacked on 2 percent, while Santos and Woodside Petroleum ended up 0.6 and 0.8 percent, respectively. Iron ore miners also had a fillip prices, with BHP Billiton and Rio Tinto rising more than 1 percent each.

Shares of News Corp elevated 2 percent, unaffected by news that the company will be carrying out a major reorganization at its Dow Jones news publishing unit.

Nikkei rises 0.9%

Japan's Nikkei 225 hurled itself back above the 20,000 mark, after falling below the key psychological mark for the first time since May 19 in the previous session.

The Tokyo bourse and the yen were little moved on the BOJ's policy decision.

Automakers were among the top gainers for the day; Suzuki Motor surged 1.6 percent, while Toyota Motor and Honda Motor closed up 0.6 percent each. notched up 0.8 and 0.6 percent, respectively. Nissan, which announced a 1.9 percent rise in May sales figures for Asia and Oceania, bounced up 1.5 percent.

Seven & i Holdings piled on nearly 3 percent after the Nikkei business daily reported that the supermarket operator likely logged a record first-quarter profit.

Kospi adds 0.3%

South Korea's key Kospi index chalked up a three-day winning streak on Friday.

Brokerages and airlines were among the sectors that attracted hefty buy orders. Daewoo Securities outperformed the sector with a 5.6 percent rally, while Hyundai Securities and Mirae Asset Securities leaped 4.8 and 1.9 percent, respectively.

Staging a comeback after recent losses, Korean Air Lines and Asiana Airlines closed up 6 and 5 percent, respectively. The local carriers, together with other tourism-related counters, have underperformed since the country's outbreak of Middle East Respiratory Syndrome (MERS).

Meanwhile, market participants continue to focus on the battle between Samsung Group and U.S. hedge fund Elliott. Cheil Industries and Samsung C&T finished 1.8 and 0.2 percent higher, respectively, after a South Korean court said it will rule on Elliott's injunction request to block a planned merger between the two Samsung affiliates by July 1.

Cheil Industries is the de facto holding company of Samsung Group.