Asian stocks traded mixed on Thursday, with Chinese shares significantly lower after a lower-than-expected preliminary reading of mainland manufacturing activity. Trading was subdued as investors stay on the sidelines before a gathering of central bankers in Jackson Hole later in the day.
HSBC flash China purchasing managers' index (PMI) fell to a 3-month low in August, coming in at 50.3. The reading is much lower than a Reuters poll expecting 51.5 and following an 18-month high of 51.7 in July.
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U.S. stocks ended mostly higher on Wednesday after minutes from the Federal Reserve's last policy meeting showed that some Fed officials want a "relatively prompt" rate hike based on the economy's progress.
After rising above its record close of 1,987.98 set on July 24, the S&P 500 ended up 0.3 percent at 1,986.51, less than 5 points from its intraday record. The Dow Jones Industrial Average gained 0.4 percent while the tech-heavy was little changed.
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Geopolitical tensions
On Wednesday, U.S. President Barack Obama condemned the beheading of an American journalist by Islamist militants and vowed the U.S. would do what it must to protect its citizens. The U.S. State Department has requested additional military personnel in Iraq, according to Reuters.
In eastern Europe, Kiev-backed forces are steadily gaining the upper hand in eastern Ukraine and are tightening the battle around main rebel bastions of Donetsk and Lyhansk.
Meanwhile, the war in Gaza rages on, with Hamas saying on Wednesday that an Israeli air strike killed the wife and infant son of its leader, Mohammad Deif, in an attempt to assassinate him after the collapse of a ceasefire.
Mainland shares down
China's Shanghai Composite Index came under pressure as a disappointing HSBC preliminary reading of China's PMI for the month of August rekindled fears of a slowdown in the mainland.
Banking stocks were lower; China Construction Bank and Bank of Communications tumbled 0.5 and 0.7 percent each while Industrial and Commercial Bank of China slumped 0.6 percent.
Hong Kong's Hang Seng Index also traded 0.9 percent lower.
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Sydney flat
Australia's benchmark S&P ASX 200 index pared gains to close a tick higher above the flatline, following a mixed bag of earnings releases.
The Australian Securities Exchange announced a 10 percent rise in annual net profit, in line with expectations, elevating shares of the bourse operator by 1.6 percent.
Port and rail freight firm Asciano jumped over 2 percent, despite posting a below-view 2 percent growth in annual underlying net profit.
AMP gained over 4 percent after the Sydney-based retail funds manager saw a 16 percent rise in underlying profit.
Global wine-making firm Treasury Wine Estates lost over 2 percent, after reporting a 20 percent fall in annual net profit.
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Tokyo rises 0.9%
A weak yen lifted Japan's Nikkei index closed at a three-week high, after seeing gains for the ninth straight session, on Thursday. The currency traded above 103.7 against the U.S. dollar, which got a boost from Fed minutes overnight.
Exporter stocks were the main beneficiaries from the soft yen; Automakers Suzuki Motor and Honda surged 2 and 2.3 percent each. Toyota Motor and Nissan Motor also rallied 0.7 and 0.6 percent, respectively.
Meanwhile, a survey showing manufacturing activity accelerating in August helped sentiment. The Markit/JMMA flash Japan PMI jumped to a seasonally adjusted 52.4, up from 50.5 in July and the highest reading since March.
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Seoul plunges 1.4%
South Korea's key Kospi index plummeted on Thursday as concerns of a slowdown in China's manufacturing sector ignited risk-on mode.
Blue-chip stocks saw losses all day. Posco lost nearly 3 percent Samsung Electronics tumbled over 2 percent. The tech firm was in the news for teaming up with U.S. largest retail bookseller Barnes & Noble to launch a new Galaxy Tab 4 Nook.
Hyundai Motor remains in focus on news that no agreement was reached in the latest round of wage talks with its union workers. Shares of the carmaker slumped 0.9 percent on fears that strikes could come as early as Friday. Fellow automaker Kia Motors plunged nearly 3 percent.
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Bangkok in focus
In Thailand, junta leader General Prayuth Chan-ocha was elected prime minister. The widely expected move did not incur much movements on the Thailand's SET index, which bounced between a modest 0.1 and 0.2 percent gain.