Asian stocks turn mixed after positive China data; Syria weighs
Asian equities were mixed on Wednesday after the latest round of positive data from the mainland lifted Japanese and Chinese risk appetite but concerns about a U.S. strike against Syria continued to weigh on the rest of Asian stocks.
Amid gainers, Japan's benchmark index erased earlier losses to hit a one-month high while the Shanghai Composite hit a two-and-a-half week high. But Australia's S&P ASX 200 eased 0.7 percent while both South Korea's Kospi ended flat.
Meanwhile, emerging markets were mixed. India's Sensex recovered 1.8 percent after the previous day's 4 percent tumble while the Jakarta Composite closed down 2.17 percent.
(Read more: El-Erian warns of Syria 'massive network effects')
US strike on Syria looms
As Wall Street shares resumed trade on Tuesday after a long weekend, ongoing worries over Syria capped gains for all three major U.S indices.
Key U.S. Congressional leaders have backed President Barack Obama's call for strikes on Syria to retaliate against President Bashar al-Assad's alleged use of chemical weapons against civilians. President Obama reiterated that any U.S. military action against President Assad's regime would be limited in scope and not repeat the long wars in Iraq and Afghanistan. House Speaker John Boehner said he would support Obama's decision and urged his colleagues in Congress to follow suit.
(Read more: If US bombs Syria, here's how high oil could go)
Nikkei up 0.5%
Japan's benchmark index closed above the 14,000 mark, its highest level since August 6, as the yen weakened to 99.8 per dollar, near a one-month low of 99.86.
(Read more: Dollar-yen's break past 100 may hinge on 3 events)
News that an earthquake with a preliminary magnitude of 6.9 hit southern Japan, including Tokyo, did not sent sentiment.
Banks and manufacturers led the recovery. Mizuho Financial and Mitsubishi UFJ rallied 2 percent each while camera maker Canon increased nearly 4 percent after announcing it will buy back up to 1.6 percent of its own shares.
Tokyo Electric Power Company skidded 3 percent after the nation's nuclear watchdog said that radiation readings at the Fukushima nuclear plant have hit a record high.
The Bank of Japan (BOJ) kicks off a two-day monetary policy meeting on Wednesday and while no action is expected, the Asahi newspaper reported that the central bank may consider further easing if Prime Minister Shinzo Abe decides to raise the sales tax as planned in April.
Shanghai above 2,120
China's benchmark index also reversed earlier losses to enter positive territory in afternoon trade after growth in China's services sector hit a five-month high in August, according to HSBC's services purchasing manager's index (PMI).
The index rose above the 2,123 mark to hit its highest levels since August 16.
Gold miners lent support with Zijin Mining and Zhongjin Gold higher by over 1 percent each after gold prices extended gains to trade above $1,400 an ounce.
China Construction Bank was flat after Bank of America exited its eight-year investment in the lender with a $1.5 billion stake sale.
(Read more: Greece and Spain to carve the way for Chinese banks?)
Sydney down 0.7%
Australia's benchmark index fell off Tuesday's three-and-a-half month peak due to broad based declines in banks and resource stocks.
The index was little changed after second-quarter gross domestic product (GDP) rose by an annual 2.6 percent, a touch higher than expectations for a 2.5 percent rise.
Billabong was the worst performing stock with losses of 6 percent after The Australian newspaper reported that its minority shareholder Coastal Capital International criticized the retailer for going ahead with a $325 million recapitalization plan without shareholder approval.
South Korea's benchmark index pared earlier losses to rise above the 1,930 level in afternoon trade but still closed in negative territory due to profit-taking.
South Korea's central bank said foreign reserves rose to another record high at the end of August, which adds a further layer of protection against potential shocks from a reduction in U.S. stimulus.
India up 1.4%
Sentiment in Indian markets rose after the central bank aggressively intervened to support the rupee, which fell nearly 1 percent to 67 per dollar in afternoon trade.
(Read more: Baptism of fire for India's new central bank chief)
Blue-chip stocks helped India's benchmark index recover from the previous session's 4 percent decline. Tata Motors and Bharti Airtel rallied over 3 percent each while Bharat Heavy Electricals was the index's outperformer, up 4.5 percent.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC