Asia stocks higher on upbeat data; Shanghai at 14-month peak

Asian equities finished mostly higher on Wednesday following stronger-than-expected economic data from China and Australia.

HSBC's China services purchasing manager's index (PMI) expanded at its strongest pace in 17 months in August while the government's official PMI rebounded from July's six-month low. Meanwhile, Australia's gross domestic product for the April-June period rose 0.5 percent on quarter, above expectations.

"It's great to see good news resulting in equity appreciation, rather than the market pricing out stimulus and subsequently falling," said Chris Weston, chief market strategist at IG, in a note.

The U.S. dollar index jumped to an over one-year high in Asian trade following robust U.S. economic data overnight. The pace of manufacturing growth soared to a three-year high in August while July construction spending was at its highest in over five years.

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Shanghai rises 1%

Mainland shares rose to a new 14-month high, extending gains into a fourth session, following the upbeat services PMI reports.

Shipping stocks rallied after the State Council said that Beijing plans to build an efficient shipping system by 2020. China Shipping led gains by 4 percent while COSCO Shipping ended 0.2 percent higher after increasing as much as 2 percent earlier.

Hong Kong's benchmark Hang Seng Index climbed 2 percent to a more than one-week high.

Nikkei 0.4% higher

Japan's benchmark Nikkei pared gains after jumping 1 percent earlier in the day. Still, the index ended at a new seven-month high, lifted by a weaker currency.

The yen dropped to a eight-month low against the dollar, sending currency-sensitive exporters Sony nearly 3 percent higher while Panasonic and Fanuc closed up nearly 2 percent each.

Focus was on Prime Minister Abe's cabinet reshuffle, his first since returning to office in 2012. According to local media reports, five women ministers are due to be appointed as Abe pushes to have more women in the workforce.

ASX dips 0.1%

Australian shares reversed gains in the final hour of trade, moving off a two-week high, while the Australian dollar rebounded modestly from Tuesday's eight-day low following a better-than-expected GDP report.

Miners were under pressure as iron ore prices approached a five-year low. BHP Billiton and Fortescue Metals lost over 2 percent each while Rio Tinto shed more than 1 percent.

Kospi flat

Steep losses among automakers dragged South Korea's benchmark Kospi index to a three-week closing low.

Hyundai Motor and Kia Motors lost 1.5 and 2 percent, respectively, extending losses into a second day, after Hyundai's 20th round of wage negotiations failed.

Emerging markets higher

Indonesian, Philippine and Thai shares all rose to their highest levels since May 2013 while India's Nifty index rose 0.4 percent to its third consecutive record high.