Asian shares outside China drifted higher on the first trading day of the third quarter, as traders digested a raft of economic indicators and news that Greece missed the deadline for a payment to the International Monetary Fund hours after its bailout program expired.
The IMF on Tuesday confirmed Greece did not pay its 1.6 billion euro loan installment. IMF spokesman Gerry Rice said Greece can now only receive further IMF funding once the arrears are cleared.
Mainland indices erratic
China's Shanghai Composite index nosedived in the afternoon session, after fluctuating between gains and losses following the release of manufacturing data.
The Shanghai bourse finished 5.23 percent lower, while the blue-chip CSI 300 index plunged 4.9 percent. The smaller Shenzhen Composite closed down 4.8 percent and the start-up ChiNext board eased 4.3 percent.
"I feel the more plausible reason is the lack of updates on the potential stamp duty cut and initial public offering (IPO) suspension, as supportive initiatives for the recent stock market slump. Given the flighty and impatient nature of retail investors, the silence on more action could have prodded them to pare risks in the equity markets," Bernard Aw, IG's market strategist, wrote in a note.
"The persistent fall in margin debt may also have contributed to the pullback," said Aw, adding that outstanding margin lending on the Shanghai Stock Exchange fell for a seventh-straight day on June 30 to 1.34 trillion yuan.
Hong Kong markets are closed for the Special Administrative Region Establishment Day.
Read MoreChina PMI paints lackluster picture
Released Wednesday morning, the country's official manufacturing purchasing managers' index (PMI) stood at 50.2 in June, steady from the previous month and just above the 50-mark that that separates growth from contraction, data showed on Wednesday. A Reuters poll had expected a figure of 50.3. The final HSBC PMI, which focuses more on small and medium sized firms, came in at 49.4 last month - below a preliminary reading of 49.6 but above the 49.2 recorded in May.
Meanwhile, growth in the mainland's services industry picked up pace in June, according to government data. The non-manufacturing PMI rose to 53.8 from May's 53.2, adding to signs of improvements in the world's second-largest economy.
Nikkei gains 0.5%
Japan's Nikkei 225 chalked up a second day of modest gains after the Bank of Japan's (BOJ) quarterly Tankan survey showed the country's large manufacturers more optimistic than expected, with the index hitting its highest level since March 2014.
On the corporate news front, Sony trimmed gains to 0.3 percent after rising as high as 2 percent earlier in the session. Shares of the electronics maker tumbled more than 8 percent on Tuesday after announcing plans to raise up to $3.6 billion by issuing new shares and convertible bonds so as to invest in its fast-growing sensor business.
Analysts attributed Tuesday's selloff to the dilution of existing shares
"The good news [of this move] is that the sensor business is one of the few areas in Sony's empire that's doing well and it makes all the sense in the world to pour more money into a part of the business that's doing well," Charles Sizemore, CIO at Sizemore Capital Management, told CNBC.
"But they massively diluted their shareholders in the process. So what should be good news about expanding a promising line of business turned into bad news." Sizemore added.
Suzuki Motor halved losses to eventually close down 3.1 percent after the company's chief executive office named his son to succeed him as president.
ASX rises 1%
Australia's S&P ASX 200 index surged, as financials and energy producers attracted hefty buy orders.
QBE Insurance climbed 3.4 percent, while Macquarie Group advanced 1.4 percent. Among the four major lenders, Commonwealth Bank of Australia led gains with a 1.05 percent rise, while Australia and New Zealand Banking and Westpac closed up 0.9 and 0.7 percent, respectively.
Port and rail operator Asciano surged nearly 20 percent following news that it received an $6.80 billion offer from Canada's Brookfield Infrastructure Partners.
Kospi jumps 1.1%
South Korea's Kospi index shook off a sluggish start to storm past its peers late Wednesday, ending at a near one-month peak.
Earlier in the session, the Seoul bourse struggled amid the release of data which showed a less-than-stellar picture of the South Korean economy. Exports fell 1.8 percent in June from a year earlier, exceeding Reuters' expectations for a 1.0 percent drop, while imports declined a bigger-than-expected 13.6 percent in June.
The Nikkei/Markit PMI slid to a seasonally adjusted 46.1 in June, marking the lowest reading since September 2012 and the fourth consecutive month in which manufacturing activity shrank. Meanwhile, consumer price index (CPI) rose 0.7 percent on-year in June, touching a five-month high.
Shares of Samsung C&T and Cheil Industries held on to gains of 0.6 and 2 percent, respectively, after a South Korean court denied a request from U.S. activist fund Elliott to block a shareholder vote on a proposed $8 billion merger between the two Samsung Group companies.