Asia Markets

Asian stocks pause after recent rally; Syria fears ease

Asian equities took a breather from this week's rally on Wednesday after President Obama confirmed that a Congressional vote to take military action in Syria will be postponed.

In a speech to the American public, Obama said he would work with U.S. allies to force Syria to hand over its chemical weapons. His comments came after Damascus accepted Moscow's proposal to give up its weapon stockpile in a bid to avoid a U.S. strike.

Both Australia's and the Kospi climbed to their highest levels in nearly four months while the Shanghai Composite rose to a 3-month high. But Japan's Nikkei pared gains to close flat. Indian stocks also closed flat.

(Watch: Obama's speech to America on Syria)

Sydney up 0.6%

Putin is in control of Syria diplomacy: Pro
Putin is in control of Syria diplomacy: Pro

Australia's benchmark index ended at its highest level in three-and-a-half months above the 5,210 mark. The index traded just 12 points shy of a new five-and-a-half-year peak of 5,246 points last hit in May.

Resources led the gains with Cudeco and Fortescue Metals higher by 13 and 6 percent, respectively but gold miners dragged after spot gold hit a three-week low. Kingsgate Consolidated led losses by 3 percent.

Meanwhile, retailers Harvey Norman added over 2 percent while David Jones rose 1 percent after a survey of consumer confidence surged to a 33-month peak in September.

(Read more: Is the Aussie dollar heading for parity?)

"A range of factors seem likely to have played a role, including: low interest rates, the lower AUD and the prospect of a change of government (which subsequently occurred). We continue to expect that the RBA may not need to cut rates further," wrote economists at HSBC in a research note, referring to the survey's results.

Seoul rises 0.5%

South Korean stocks reversed earlier losses to close above 2,000 points, its highest level since May 31 thanks to encouraging economic data.

The nation's unemployment rate fell to a four-month low in August while news that Pyongyang and Seoul agreed to re-open the Kaesong industrial park also lifted sentiment.

Apple chip maker LG Display shed 3 percent after the U.S giant's two new iPhones - the iPhone 5C and the iPhone 5S - failed to impress investors.

(Read more: Apple supplier shares slump on iPhone 5C pricing)

Nikkei flat

Japan official: Tax hike may hurt economy
Japan official: Tax hike may hurt economy

Japanese equities pared gains in late afternoon trade to fall below 14,440 points, moving away from a seven-week high hit earlier in the session.

The yen weakened to a seven-week low against the greenback at the 100.60 level and that lifted industrial stocks. Battery maker GS Yuasa outperformed to rally 8 percent while automakers Mitsubishi Motors and Isuzo Motors rose 4 and 5.3 percent, respectively.

(Read more: Doubts over plan to raise Japan sales tax linger)

Sentiment also rose after Prime Minister Shinzo Abe on Tuesday called on his cabinet to put together a new economic package by the end of this month. Analysts say the move suggests Abe will go ahead with plans to hike the sales tax from April and will use the new package to soften the blow to the economy.

Shanghai up 0.1%

China's benchmark stock index tracked Asia-wide gains to rise above 2,240 points hitting a new three-month high.

China State Shipbuilding rallied 10 percent after saying it plans to raise over $1 billion through a private share sale in order to build warships, the first time Beijing has tapped capital markets to fund its military expansion. The news prompted a rally in the sector with China Shipping Container Lines also up 10 percent.

But financials weighed on the index with Bank of China and Agricultural Bank of China down 1 percent each even after data from the central bank showed new bank loans topped forecasts in August.

(Read more: Corporates take emerging market volatility in stride)

"We believe it's extremely unlikely for China to have another interbank liquidity crunch in the near future. Interbank rates may inch up towards late September, but most likely the PBOC will do whatever it can to prevent a possible liquidity squeeze," said analysts at Bank of America Merrill Lynch in a note.

India closes flat

Bombay's Sensex index fell below the 2,012 mark, retreating from a seven-week high even as the rose for a fifth straight session. The index closed flat.

— By's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC