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China stocks lead Asia higher; Takata drops over 3%

Asian stock markets rallied on Thursday on the back of strong U.S. data, with China's benchmark index leading the gains.

The Dow and S&P 500 closed at fresh record highs overnight after the Federal Reserve's Beige Book showed optimism about the economic outlook. Other strong data also boosted sentiment; the ISM services index leapt to a three-month high in November and the ADP report on private payrolls showed sector employment kept up its recent pace last month.

The European Central Bank holds its policy review later today, and while most economists don't expect any action, markets will be looking for indications that more stimulus could come early next year as the region's economic recovery falters.

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"The prospect of a sovereign bond buying program is looking ever more likely. It probably won't begin tonight [Thursday] but the prospect will only increase sentiment towards European equities," said Evan Lucas, market strategist at IG.

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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Shanghai 4.3% higher

China's benchmark Shanghai Composite hit fresh three-year highs on expectations of further stimulus measures, closing in sight of the 3,000 level. Earlier this week, Reuters reported the People's Bank of China may announce a cut in reserve requirements for banks, citing analysts.

Sinopec and PetroChina surged 10 percent each, tracking gains in oil prices. Financials also outperformed with Citic Securities, Huati Securities and China Merchants Bank up 10 percent each.

Read MoreChina Railway Construction flexes muscles abroad

Meanwhile, Hong Kong's benchmark Hang Seng Index jumped 1.6 percent, recovering all of the the previous session's losses.

Nikkei up 0.9%

Japan's benchmark Nikkei extended gains into a fifth session, tracking movements in the currency. The yen weakened to a new seven-year low of 119.89 per U.S. dollar in early trade.

Exporters rose across the board, with Fanuc and Honda Motor both more than 2 percent higher.

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Takata lost over 3 percent after Ford Motor said it would expand its recall on the Japanese firm's airbag inflators.

ASX 0.9% higher

Australian shares rose to a new one-week high, extending gains into a third session, while the Australian dollar moved off four-year lows on the back of strong October retail sales and trade data.

Banks led the gains, with Westpac nearly 2 percent higher and Australia New Zealand Banking up 1.4 percent.

Read MoreRBA easing threatens to "cut Aussie's legs off"

Education provider Vocation slumped 61 percent after cutting its profit forecasts for the year to June by half.

Kospi up 0.8%

South Korean shares ended at their highest level since October 1 after data showed revised third-quarter gross domestic product rising 0.9 percent on quarter, in line with earlier estimates.

Shipbuilders were the biggest gainers on the Kospi as investors went bargain hunting. Hyundai Heavy Industries surged 5 percent and Daewoo Shipbuilding popped 2.6 percent.

Nifty flat

Indian shares hit a record high, tracking Asia-wide gains with cigarette maker ITC surging 5 percent on reports the government may ban sales of loose cigarettes.