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Shanghai underperforms in choppy session; rest of Asia up

Asian stock markets enjoyed an upbeat session on Friday, as investors took heart from the surge on Wall Street overnight, while steady oil prices also provided support. However, volatile trade played out in Shanghai, with the benchmark index eventually closing down 0.2 percent after jumping to its highest level since August 2009.

Overnight, U.S. stocks surged for a second day, led by expectations for more aggressive action from the European Central Bank to buttress the economy. Markets were also buoyant after a better-than-expected number for jobless claims last week, indicating continued acceleration in the U.S. economy.

The Dow Jones Industrial Average finished up 1.8 percent, while the S&P 500 added 1.8 percent and the tech-heavy Nasdaq gained 1.8 percent. Thursday's robust gains lifted all three indexes into positive territory for 2015.

Global oil prices were little changed on Thursday, with better-than-expected U.S. data helping the market hold steady after recovering from a four-day losing streak a day earlier. Brent crude climbed 21 cents to $51.17 by 0203 GMT while U.S. crude for February delivery was at $49.13, up 34 cents.

Meanwhile, market players will be looking ahead to the U.S. nonfarm payrolls for the month of December, due late Friday.

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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Mainland indices mixed

After charging up to a more than four-year high of 3,404 points on hopes of further monetary easing, China's benchmark Shanghai Composite index quickly reversed gains to close down modestly on Friday.

Property majors flitted between gains and losses all day; China Merchants Property and Gemdale closed down nearly 3 percent each while Poly Real Estate traded 1.5 percent lower.

Banking stocks helped to cap losses on the bourse; Beijing Bank jumped 5.2 percent while Bank of China and Industrial and Commercial Bank of China rallied 3.5 and 1.2 percent each. Insurance plays also had a positive session, with China Life Insurance leading gains with a 6.1 percent rise.

Earlier, data showed the mainland's consumer price index (CPI) hovered near a five-year of 1.5 percent in December. While the inflation figure is in line with expectations, it offered signs of persisting weakness in the economy. Meanwhile, the producer price index (PPI) fell 3.3 percent on-year in December, worse than the 2.7 percent decrease in the preceding month, chalking up its 34th consecutive decline. Analysts polled by Reuters had expected a 3.1 percent decline in producer prices.

Meanwhile in Hong Kong, the Hang Seng index retreated from a near five-week high to close up 0.4 percent.

Top on trader's watch list is Standard Chartered, which fell 1.5 percent following the lender's decision to dismantle its stock broking, equity research, and equity listing desks worldwide, which will result in more than 200 job cuts. Shares of the bank was unaffected on Thursday, closing up 2.7 percent.

Chinese sportswear giant Li Ning erased early gains to tank more than 2 percent after issuing a profit warning. Chow Tai Fook also receded nearly 8 percent; the jeweller's fiscal third quarter revenue fell 10 percent after pro-democracy protests last year hurt store traffic.

Read MoreWeak yen last straw for small Japanese firms

Nikkei rises 0.2%

Japan's benchmark Nikkei 225 index trimmed gains in the afternoon session as the yen strengthened modestly, but managed to clinch a third straight winning session on Friday.

Fast Retailing, owner of clothes brand Uniqlo, jumped 0.8 percent, buoyed by a 40 percent on-year jump in first quarter operating profit, helped by overseas sales.

Sony is in focus after announcing a delay in the launch of its Playstation 4 game consoles in China, initially slated for this Sunday. Shares of the consumer electronics giant leapt 1.3 percent.

Honda moved up 1.2 percent despite being fined $70 million by the U.S. government for not reporting consumer claims involving its cars. The fine will be the largest amount ever paid by an automaker, as a result of an investigation by the National Highway Transportation Safety Administration.

Daiichi Sankyo underperformed with a decline of more than 5 percent, despite receiving an approval for an anti-clotting drug by the U.S. food and drug administration.

ASX up 1.6%

Australia's key S&P ASX 200 index brushed off a set of weaker-than-expected retail data released early Friday to finish higher, while the Australian dollar erased losses to inch up 0.1 percent, fetching $0.8129 against a stronger dollar.

Retail sales for November rose 0.1 percent month-on-month, below expectations for a 0.2 percent increase. "This follows a 0.4 percent [rise] in the previous month and a 1 percent [rise] in the month before that, so retail isn't doing too bad in Australia," Jonathan Cavenagh, senior FX strategist at Westpac Bank, told CNBC's "Street Signs Asia" on Friday.

After the data, Myer and Harvey Norman widened gains to nearly 4 percent each, while JB Hi-Fi closed up 0.4 percent.

A pause in the slump in oil prices lifted the beaten-down oil and gas sector. Santos and Oil Search climbed 5.3 and 3.7 percent each, while Woodside Petroleum gained 3 percent. Big miners were also upbeat, as recent moves in iron ore encouraged investors to engage in bargain hunting; Fortescue Metals and BHP Billiton closed up 4.1 and 2.8 percent, respectively.

Read MoreChinese property stocks: Investor darling in 2015?

Kospi gains 1.1%

South Korean shares extended Thursday's gains to hit a one-week high as index heavyweights surged, while the junior Kosdaq index advanced 1.2 percent.

Carmaker Kia Motors settled 2.3 percent higher, while Hyundai Motor, the second heaviest weighted stock on the Kospi index, advanced 1.1 percent on Friday.

LG Display, South Korea's largest display maker, and LG Electronics reversed earlier gains to drop nearly 1 percent each, despite market optimism for better earnings. Memory semiconductor supplier SK Hynix also reversed gains to close down 0.5 percent.