Shanghai, Seoul underperform in Fed-inspired rally

Asian equities mostly rose on Thursday, with the exception of Shanghai and Seoul, as investors took heart from a turn in oil prices and after the Federal Reserve said it was confident in the U.S. economy.

Overnight, U.S. stocks surged, with the blue-chip Dow marking its best session of the year, after Fed Chair Janet Yellen said in her last news conference of 2014 that the Fed is unlikely to start its rate hike process for "at least the next couple of meetings." The Dow Jones Industrial Average rose 1.7 percent, while the S&P 500 added 2 percent, with energy pacing gains among its 10 major sectors. The tech-heavy Nasdaq gained 2.1 percent.

Another positive boost for markets comes in the form of a recovery in oil prices, after U.S. data showed falling crude inventories. U.S. crude futures were little changed above $56 a barrel on Thursday. London Brent crude for February delivery was untraded yet, after settling up $1.17 at $61.18.

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Mainland bourses mixed

China's benchmark Shanghai Composite index lagged behind its regional peers on Thursday following the release of falling new home prices for November, which pointed to a persistent property downturn despite efforts by authorities to energize the market.

The property sector was largely lower; Gemdale tanked 3 percent while Vanke closed down 2.6 percent. Brokerages pulled back sharply after rallying for the past sessions; Founder Securities and HuataiSecurities sold off over 8 percent, respectively.

China Railway Construction rose the maximum allowable 10 percent on news that China signed a memorandum of understanding with Serbia and Hungary on Wednesday to build a new rail link between Belgrade and Budapest by mid-2015.

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Hong Kong shares moved away from the morning's high of 22,935 points to add 0.8 percent late Thursday. The key Hang Seng index, dogged by bearish sentiment in the previous sessions, touched its lowest levels since October 3

Gaming stocks are in focus on news that Beijing is cracking down on multi-billion dollar illicit fund flows into Macau. Melco Crown dipped 1.4 percent while Sands China and Galaxy Entertainment rose 2.2 and 3.2 percent each.

Carmaker BYD Co fell by more than 45 percent in Hong Kong, while shares in Shenzhen fell by the 10 percent daily limit amid concerns that it's losing market share to foreign rivals in China's auto market.

Nikkei jumps 2.3%

Japan's benchmark Nikkei 225 got a fillip from a weaker currency on Thursday, reclaiming territory above the 17,000 level, as dollar-yen marched towards the 119 handle.

As a result, blue-chips majors like Canon and Toyota Motor made gains of 1.7 and 1.5 percent each. Sony rallied nearly 5 percent, unaffected by reports that North Korea was behind a cyber attack on Sony Pictures which has resulted in the studio pulling all plans to release its comedy "The Interview."

Read MoreJapan to spend on stimulus, but keep issuance in check

Nissan Motor notched up 0.9 percent despite ordering the recall of more than 80,000 vehicles sold in Mexico to check for potential defects stemming from air bags made by Japanese company Takata.

Meanwhile, the Bank of Japan kicks off its two-day monthly meeting today and will release its last policy decision for the year on Friday. The central bank is widely expected to keep monetary settings unchanged and offer a slightly brighter view of the economy on tentative signs of recovery from recession, Reuters quoted sources as saying.

"The yen is seeing a bit of weakness heading into tomorrow's BOJ meeting results. Whether this is the beginning of a sustained recovery for Japan remains to be seen, but as long as the USD maintains its upward trajectory, that's one step of the way there for the Nikkei," said IG market strategist Stan Shamu.

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ASX surges 1%

Australia's S&P ASX 200 index entered a two-day winning streak, hitting a one-week high of 5,265 points earlier in the session, as the Fed's upbeat economic assessment and an uptick in oil prices lifted trading sentiment.

Oil and gas producer Santos climbed 5 percent while Oil Search bolstered 4.4 percent. Resource miners Rio Tinto and BHP Billiton settled 2.5 and 1.9 percent higher, respectively, while Fortescue Metals raked in a 6.4 percent gain.

The hardest-hit stock was Flight Centre Travel Group, which plummeted over 9 percent after issuing a profit downgrade.

Meanwhile, the Australian dollar moved off multi-year lows to trade at 8,127 to the dollar at 1410 SIN/HK, seemingly unaffected by declining house prices in the mainland.

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Kospi slips 0.1%

South Korean shares retreated from an intra-day peak of 1,919 points to end Thursday slightly below the flatline as blue-chips lost grounds.

Posco reversed openings gains to finish 0.5 percent lower while Samsung Electronics ended flat. Hyundai Motor tumbled nearly 1 percent as a weak rouble threatened to undercut profit margins in the Russian market.

Cheil Industries, which is the holding company of Samsung, closed up 6.6 percent after doubling its listing price of 53,000 won on its market debut. The initial public offering is said to be the third biggest ever in South Korea and shares were over-subscribed 195 times.

Meanwhile, shares of Korea Gas eased 0.1 percent on news that South Korean prosecutors issued an arrest warrant for its CEO Jang Seok-hyo over bribery and breach of trust.