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Asian shares mostly higher; Tokyo, Sydney at fresh one-week highs

Most Asian bourses traded higher on Thursday following a firm finish on Wall Street overnight, with Tokyo, Sydney and Seoul shares closing at new highs. Mainland shares extended losses into a second session as Wednesday's monthly indicators cast doubt over the Chinese economy.

U.S. shares ended Wednesday with gains, on the back of surging tech, airline and biotech shares. The Dow Jones Industrial Average climbed 0.6 percent, with Intel leading blue-chip gains. The S&P 500 added 0.7 percent while the tech-heavy Nasdaq bolstered 1 percent.

U.S. retail sales were unexpectedly flat in July, data from the U.S. Commerce Department showed Wednesday, held back by a second straight month of declines in receipts at auto dealers, as well as weak sales of furniture, electronics and appliances. July's reading was the weakest since January.

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Geopolitical events

In Ukraine, Kiev denounced Russia's dispatch of a humanitarian aid convoy as an act of unbounded cynicism serving pro-Russian separatists and said the trucks would not be allowed to pass. Reports on Thursday morning said that the aid trucks were currently standing idle at a military base in Voronezh in Russia, close to the Ukrainian border.

Over in the Middle East, Israel and Palestinian factions agreed to extend the truce for five more days on Wednesday in order to reach a lasting agreement to end the fighting in Gaza, Reuters reported.

In Iraq, 130 U.S. military advisers arrived in Irbil. Secretary of Defense Chuck Hagel on Tuesday reiterated that the U.S. is not going back into Iraq with a "combat boots-on-the-ground operation."

Symbol
Name
Price
 
Change
%Change
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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Tokyo climbs 0.7%

Japan's key Nikkei index extended gains into a fourth session to hit a one-week high, on the back of a weak yen. The Japanese currency, trading above 102.5 against the U.S. dollar, was at its weakest since August 5 and offset negative sentiment from a below-view machinery orders data.

June's core machinery orders rose 8.8 percent on-month, below Reuters' estimates for a 15.3 percent rise and followed a 19.5 percent on-month decline in May.

As a result, exporter stocks were on a roll; Suzuki Motor and Panasonic rallied 1.7 and 1.2 percent each.

Read MoreChinese most likely to lie about their vacations

Mainland shares down

China's Shanghai Composite Index widened losses in the final hour of trade to close 0.7 percent lower. Wednesday's unexpectedly weak growth in July's investment, retail sales and bank lending, which pointed to vulnerabilities in the world's second-largest economy, weighed on sentiment.

The top loser for the day was Baotou Steel which tumbled nearly 4 percent.

Banking stocks remained downbeat. Bank of China and China Construction Bank lost 0.4 and 0.7 percent, respectively. Smaller banks like Merchants Bank and Minsheng Bank closed down 0.9 and 1.1 percent each.

Meanwhile, Hong Kong stocks fell 0.2 percent. Lenovo threw away early gains to lose 1.6 percent despite announcing a 23 percent rise in profits in the first fiscal quarter.

Sydney rises 0.6%

Australia's benchmark S&P ASX 200 ended at 5,548 on Thursday, a new closing high not seen since 5 August, underpinned by a slew of strong earnings released before the open.

The country's largest telco Telstra jumped over 2 percent after reporting a 14.3 percent rise in annual net profit, beating analyst expectations.

Media group Fairfax held steady at over 6 percent gain all day, on news that it returned back to profit with an annual net earnings of $208.8 million. Goodman Group, which reported a near 50 percent surge in full year revenue, closed 1.1 percent higher.

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Seoul flat

South Korean shares rebounded with modest gains to close with a fresh one-week high of 2,063 on Thursday. Earlier in the session, the benchmark Kospi index surged as much as 0.7 percent to hit a one-and-a-half-week-high of 2,073 but lost all of it to fall below the flat line at midday.

Carmaker Hyundai Motor suffered a 1.5 percent loss, after its union said it will go on strike starting from next Monday. Kia Motors also lost 1.6 percent.

Meanwhile, the Bank of Korea cuts interest rates for the first time since May 2013 earlier in the session.

Read MoreChinese most likely to lie about their vacations

India, Indonesia watched

Indian shares rose ahead of its June wholesale price inflation (WPI) due later in the trading day.

Indonesia's Jakarta Composite index lost 0.3 percent as the country's central bank announced it was keeping its key interest rate unchanged at 7.5 percent.

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