Asian equity markets outside of Japan rose on Thursday as positive Chinese economic data overshadowed ongoing woes about Washington's budget stalemate.
Australia's S&P ASX 200 finished 0.4 percent higher while emerging markets were the region's outperformers with Thailand's SET and Indian stocks up 1.6 percent each. But Japan's Nikkei bucked Asia-wide gains to post its second session of declines.
Trading volumes were thin with Chinese markets shut for National Day holidays and South Korea closed for National Foundation Day.
(Read more: Markets brace for prospect of lengthy US shutdown)
China's official services purchasing manager's index (PMI) rose to a six-month high in September, lifting optimism that the world's second-largest economy is on a path to recovery. The data follows the mainland's official manufacturing PMI report earlier this week, which showed a rise in September factory activity.
Earlier in the session, Obama met with Congressional leaders to try and resolve a budget deadlock that has partially shut down the federal government but no solution was reached as Republicans and Democrats blamed each other for the stalemate.
Speaking to CNBC's John Harwood in a White House interview, Obama said that "it is important for [Wall Street] to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees and their shareholders."
(Read more: Obama to Wall Street: This time be worried)
Japanese shares ended just below the flatline following the previous session's 2 percent sell-off despite a slightly weaker yen. The currency traded at 97.8 per dollar, moving further away from its previous one-month high of 97.1 per dollar.
Trade was subdued as the Bank of Japan (BOJ) kicks off a two-day policy meeting. While the BOJ is not expected to make any major policy announcements, experts say the central bank may come under pressure to offer further monetary stimulus to buffer the impact of Prime Minister Shinzo Abe's sales tax hike.
(Read more: Shinzo Abe's letdown puts onus on Bank of Japan)
Aviation stocks are in focus with All Nippon Holdings up 2.3 percent after the Transport Ministry allotted the carrier a majority share of coveted flight slots at Tokyo's Haneda airport. That move saw rival Japan Airlines (JAL) ease 2 percent.
Sydney adds 0.4%
Australian equities rose for a second straight session thanks to higher commodity prices.
The nation's biggest builder, Leighton Holdings, tumbled over 10 percent following media reports that corruption and bribery were widespread under the firm's previous management.
But diminishing hopes for further central bank stimulus at the Reserve Bank of Australia's (RBA) November policy meeting limited risk appetite.
"The RBA's statement on Tuesday sounds like they have put the easing cue back in the rack for at least the rest of the year. We feel that it may stay there permanently, media hype around property bubbles and clearance rates are creating fears," said Evan Lucas, market strategist at IG in a note.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC