The Chinese market may receive a boost on Friday, after the People's Bank of China announced a surprise 25 basis point rate cut.
The benchmark Shanghai Compositefell for the second day in a row on Thursday to close 0.71 percent lower at 2293.13.
The cut in benchmark lending rates, effective June 8, is the first in four years and comes ahead of Saturday's release of economic data, which are expected to show further weakening in growth.
Economists interpret the move as a clear signal that Beijing is moving decisively to support the economy. The fact the rate cut is not asymmetric, as many had called for, suggested inflation is not a large concern for Beijing.
Meanwhile, Friday may see a fuel price cut of as much as 7 percent. China adjusts fuel prices in accordance with changes in global crude prices.
Separately, the Ministry of Land and Resources announced measures to deter developers from holding land for appreciation. Starting July 1, a 20 percent punitive fee will be charged for land that has been idle for more than a year, and the ministry will have the right to reclaim land that has been idle for two years.
Stocks to Watch:
Property, Banking Stocks - China's rate cut would reduce financing costs for developers and encourage home purchases. For banks the move is neutral, but the fact it is not an asymmetric rate cut can be taken to mean Beijing is protecting banks' bottom lines.
Saic Motor - China's largest automaker said May sales rose 21 percent to 368,000 units. Year-to-date sales are up 11.3 percent at 1.877 million vehicles. China's auto sales have gradually picked up pace after a slow first quarter.
—By Cheng Lei, CNBC Asia Pacific