Asian stocks mixed after China PMI in year's final session

On the last trading day of 2014, Asian shares were mixed amid thin volume, with Japan, South Korea, Indonesia, Thailand, Indonesia and the Philippines shuttered for the holiday season.

The only data for the day was the HSBC/Markit China manufacturing purchasing managers' index (PMI) for December, which came in at 49.6. The reading was up slightly from the reading of 49.5 in the preliminary reading, but still lower than November's 50.0.

The preliminary reading from HSBC/Markit indicated a contraction in activity in December for the first time in seven months. A reading above 50 indicates growth, while a reading below signals a contraction.

Tracking Wall Street, oil

U.S. stocks fell in low volume trade on Tuesday, on the back of a sharp decline in the utilities sector which led the S&P 500 down 0.5 percent. The blue-chip Dow had its biggest drop in two weeks, settling 0.3 percent lower, while the Nasdaq Composite lost 0.6 percent.

Benchmark Brent fell 44 cents to $57.46 a barrel on Wednesday as poor Chinese manufacturing data outweighed supply disruptions in Libya. U.S. crude for February delivery was down 34 cents to $53.78. In the previous session, both Brent and U.S. crude hit their lowest levels since May 2009.

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ASX falls 0.1%

Australian equities pared gains to end the year lower as commodity stocks pulled back, but the benchmark S&P ASX 200 index held on to an increase of 1.1 percent year to date.

Miners were mixed despite a rebound in iron ore prices overnight, with Atlas Iron and BC Iron jumping 6 percent each while Fortescue Metal reversed gains to fall 0.4 percent.

Gold shares also turned mixed, overlooking gains in spot gold on Wednesday. Evolution Mining and Kingsgate reversed gains to close down 2.3 and 1.5 percent each.

On Wednesday, the Australian dollar moved away from Tuesday's four-and-a-half-year low, gaining 0.3 percent to fetch $0.8177 against the greenback at 1505 SIN/HK.

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Mainland indices up

After wavering between gains and losses following the release of December's manufacturing data, China's Shanghai Composite index regained momentum to climb 2.2 percent on Wednesday and raking in 53 percent year-to-date to be the second best performer globally in 2014.

Among the actively traded stocks, Agricultural Bank of China and Everbright Bank advanced 4.8 and nearly 1 percent each while China State Construction Engineering added 1.5 percent.

CSR and China CNR were in focus after the giant train makers confirmed a $26 billion merger. Shares of both firms charged up the maximum allowable of 10 percent in Shanghai and rocketed more than 32 percent in Hong Kong, on their first day of trade since being suspended on October 27.

Read MoreChina stocks roar back in 2014, trashing India

Meanwhile in Hong Kong, the Hang Seng index edged up 0.4 percent on a shortened half day of trade, after a brief fall into negative territory earlier in the session. The benchmark index gained 1.2 percent in 2014.

"Looking ahead, we believe it will still be A-shares leading the Hong Kong market," Stephen Sheung, head of Investment Strategy at SHK Private, told CNBC Asia's "Squawk Box."

"[In 2015,] we believe there is still a double digit upside for A-shares, with the Shanghai Composite getting close to 3,500," Hong Kong-based Sheung added.

Tracking AirAsia QZ8501

The search for wreckage, bodies and black boxes belonging to the AirAsia plane QZ8501 resumed on Wednesday. The jet was carrying 162 people - including 155 passengers, 2 pilots, 4 cabin crew and one engineer - to Singapore from Surabaya, Indonesia when it vanished from air traffic radar early Sunday.

Shares of the Malaysian budget carrier recouped losses to trade little moved at 2.740 ringgit. The benchmark FTSE Bursa Malaysia KLCI index, where AirAsia is listed, eked out a 0.1 percent gain amid muted trade. For 2014, Malaysia was the worst performer in Asia, losing 5.3 percent year to date.

Meanwhile, Singapore's Straits Times index ended marginally below the flatline late Wednesday, but the bourse still managed a 6.2 percent gain for the year.