Chinese stocks crumbled under the weight of new share listings on Thursday, while the Federal Reserve's dovish stance on interest rates did little to help sentiment elsewhere in Asia.
After a two-day policy meeting, the Fed said the U.S. economy is likely strong enough to withstand a rate hike later this year, but it lowered its expectations for 2015's economic growth due to a weak start to the year.
Analysts attribute the downbeat sentiment to worries over the meeting of euro zone finance ministers taking place on Thursday.
"Any euphoria from the FOMC meeting has been lost in Asia as the attention once again turns back to the Greek debt negotiations and the EU finance minister's meeting," IG's chief market strategist Chris Weston wrote in a note.
Overnight, Wall Street shares handed over a mildly positive lead, with all three major indexes ending up 0.2 percent each amid choppy trade.
Shanghai Comp falls 3.7%
China's Shanghai Composite index tripled losses in the last hour of trade to eventually settle at a two-week closing low, while the blue-chip CSI 300 index sank 4 percent.
According to Reuters, 11 companies including brokerage giant Guotai Junan Securities started taking investor subscriptions for their initial public offerings (IPOs), while 9 more will follow suit on Friday.
The banking sector was among the hardest-hit, with heavyweights such as Bank of China and China Construction Bank, tanking more than 4 percent each.
Property counters turned negative late Thursday despite fresh data showing property prices in the mainland fell at a slower pace of 5.7 percent year-on-year in May. Shanghai Shimao retreated nearly 4 percent, while Poly Real Estate and China Vanke fell more than 2 percent each.
Hong Kong's Hang Seng Index stepped back 0.2 percent after Hong Kong's legislature rejected a Beijing-based electoral reform proposal on how to select the city's next leader.
ASX sinks 1.3%
Australia's S&P ASX 200 index declined on the back of a broad-based selloff.
Miners led the losses in the resources space; market bellwether BHP Billiton dropped 0.7 percent, while Rio Tinto and Fortescue Metals plummeted 1.9 and 4.1 percent, respectively.
Financials also saw dismal trade on Thursday, with QBE Insurace down nearly 3 percent.
Shares of Woolworths shaved off 1 percent, still hurt by Wednesday's announcement that its chief executive Grant O'Brien would retire after nearly four years at the helm of the Australian supermarket firm.
Meanwhile, New Zealand's economy expanded 0.2 percent on-quarter in the January-March period, according to official statistics released early Thursday. The reading marked the country's slowest pace of growth in two years due to a drought which curbed dairy production.
The New Zealand dollar shed nearly half a U.S. cent following the data, while the key stock index shed 0.5 percent.
National carrier Air New Zealand was the biggest loser, tumbling nearly 10 percent, on the back of news that rival Jetstar was planning to expand services to several regional cities.
Nikkei loses 1.1%
Japan's benchmark Nikkei 225 index touched its lowest level since May 19, on the back of losses among banks, insurers and carmakers.
T&D Holdings and Dai-ichi Life Insurance receded 2.6 and 1.9 percent, respectively, while Mizuho Financial Group led declines in the banking sector with a plunge of 2.3 percent.
Automakers traded on the back foot following news that Japanese brands fell to below average in the J.D. Power 2015 Initial Quality Study for the first time in 29 years. Nissan and Suzuki Motor plunged more than 2 percent each, while Toyota Motor and Honda Motor retreated 1.5 percent each.
Meanwhile, the Bank of Japan (BOJ) kicks off its two-day policy meeting and analysts are expecting no change in the central bank's monetary policy.
Kospi gains 0.3%
South Korea's key Kospi index extended Wednesday's gains, with Samsung-related stocks and retailers leading the charge.
Samsung SDS closed up 1.6 percent, breaking a three-day losing streak, as traders bet on a merger with sister company Samsung SDI. Shares of Samsung SDI also got a boost, advancing 1 percent.
Cheil Industries and Samsung C&T erased earlier gains to slump nearly 2 percent each amid uncertainty over the companies' $8 billion planned merger. On Wednesday, Samsung Group said it is confident it will defeat U.S. hedge fund Elliott Associates which has been opposing the proposed takeover, calling the terms "unlawful." Cheil Industries is the de facto holding company of Samsung Group.
Meanwhile, South Korea's parliament approved President Park Geun-hye's choice for prime minister on Thursday after the incumbent Lee Wan Koo stepped down following corruption allegations. The nominee - Justice Minister Hwang Kyo-ahn - will be the President's third prime minister since February 2013.
Read MoreElliott's latest strike at Samsung
Southeast Asia eyed
The Jakarta Composite index finished flat after Bank Indonesia (BI) kept its main interest rate unchanged for a fourth month, in line with expectations.
In Malaysia, shares of AirAsia elevated 5 percent, helped by a rebuttal from the budget carrier about its accounting practices.
The Malaysian low-cost airline said Wednesday its accounting practices were solid after being questioned by research firm GMT Research. The stock had fallen nearly 30 percent, hitting five-year lows, since the critical report was released on June 10.