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Asian stocks extend selloff as China doubts persist

The sell-off in Asian stocks continued on Thursday, with some bourses hitting multi-month lows, as whirlwind rides in mainland equity markets brought worries surrounding the world's second-largest economy back to the fore.

Meanwhile, Wall Street handed over an uninspiring lead by ending lower overnight, as minutes from the latest Federal Reserve meeting showed that conditions for a rate increase are "approaching" but not at hand. This caused markets to question the possibility of a tightening of U.S. monetary policy next month.

According to a Reuters poll released last Thursday, the Fed could raise interest rates twice this year, with the first hike coming as early as September amid improving economic fundamentals in the U.S. But an abrupt devaluation of the yuan by Chinese authorities last week has had some market watchers paring back their forecasts.

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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 down

China's benchmark Shanghai Composite slid deeper into negative turf in late trading, closing down 3.4 percent. The dramatic moves on Thursday mirrored similar action in the past two trading sessions, notably on Wednesday when the Shanghai bourse staged a U-turn in the final hour of trading to end up 1.2 percent, on the back of state-backed buying.

According to IG market analyst Angus Nicholson, the China Securities Finance Corporation (CSFC) continued to buy stocks today thereby helping the key stock index to claw back some losses during late-morning trade. However, going by the downward lurch in the afternoon trading session, they didn't seem enough to shore up investor confidence.

Most sectors in Shanghai languished, with transport, banks and brokerages leading the decline.

Among China's other indexes, the blue-chip CSI300 and the smaller Shenzhen Composite ended down 3.2 and 3 percent, respectively.

"The volatility remains because there is no clear narrative of what is going on. When you look at China, you see a government groping for answers and not looking impressive. I am not saying we are on the brink of collapse, but expect continuing volatility and a general downward trend," said independent analyst Fraser Howie.

Read MoreBaffled by China's late-day swings? Read this

In Hong Kong, the Hang Seng index fell 1.8 percent to an eight-month low, with carrier Cathay Pacific and gaming counters down on earnings releases.

Shares of the Hong Kong flag carrier tumbled 3.3 percent to a nine-month low, as first-half profit missed expectations despite rising six-fold from a year earlier.

Galaxy Entertainment slumped more than 6 percent after posting a 46 percent plunge in second-quarter earnings on the back of higher operation cost from its new casino resorts and a faltering market in Macau.

Read More'Death Cross' danger looms for China stocks

ASX skids 1.7%

Australia's S&P ASX 200 index ended at its lowest close since January 23, as renewed weakness in metals and oil prices exerted pressure on the resources and energy counters.

Copper producer Oz Minerals sagged 2.4 percent, while bigger miners such as BHP Billiton and Rio Tinto plunged 3.1 and 2.5 percent, respectively. Santos and Woodside Petroleum tanked 7.1 and 3.6 percent, respectively, as oil prices extended losses in Asian trade.

Meanwhile, lenders also finished in the red, with Commonwealth Bank of Australia being the top laggard with a loss of 2.7 percent.

On the corporate earnings front, Qantas Airways announced a return to full-year profit on the back of a tough cost-cutting program and tailwinds from cheaper fuel costs. However, shares of the flying kangaroo erased early gains to close down 6.1 percent.

AMP similarly changed course to drop 1.8 percent, despite delivering a 3 percent jump in half-year profit and lifted its interim dividend to 14 cents a share.

Bucking the downtrend, Wesfarmers gained 0.6 percent after meeting expectations with an annual net profit of $1.79 billion in the year to June.

Nikkei drops 0.9%

Japan's Nikkei 225 widened losses near the close to finish at the index's lowest level since July 13.

Commodity-related counters in Japan were battered. Inpex and JX Holdings slumped more than 2 percent each, while Showa Shell Sekiyu retreated 1.6 percent.

Steelmakers underperformed after the Nikkei business daily reported that Toyota Motor and its steel sheet suppliers are negotiating a price cut for the April-September half. JFE Holdings, Nisshin Steel and Japan Steelworks slumped between 1.5 and 4.2 percent.

Blue-chip exporters also traded on the back foot, as the yen gained ground against the U.S. dollar which was hurt by the Federal Reserve's meeting minutes. Sony and Canon lost more than 3 percent each, while Toyota Motor eased 2 percent.

SoftBank was the star performer, up 2.2 percent, on the back of news that Nikesh Arora — the man who chairman and CEO Masayoshi Son is backing as his replacement — is buying 60 billion yen ($483 million) in company shares. Arora, a former Google executive, made the investment voluntarily and in a personal capacity, according to a regulatory filing from SoftBank.

Kospi sags 1.3%

South Korea's Kospi index sealed a four-session losing streak to end at a seven-month trough, as continuous foreign selling weighed.

According to Reuters, foreigners offloaded a net 152.4 billion won ($128.51 million) worth of shares in the main board by mid-day, set to extend their selling spree to a eleventh consecutive session.

Banks, shipbuilders and energy producers were among the hardest-hit; Woori Bank and KB Financial Group retreated 3 and 1.6 percent, respectively, while Hyundai Heavy Industries and Hyundai Mipo Dockyard Co. dropped 2.1 and 5.7 percent, respectively.

In the energy space, S-Oil led losses with a 3.6 percent plunge. SK Innovation and LG Chem closed down more than 1 percent each.

Rest of Asia

Taiwan's weighted index cut losses to close up 0.1 percent on Thursday, after concerns surrounding the local economy took the bourse down to its lowest level since September 2013 in the previous session. Last Friday, Taiwan halved its gross domestic product growth forecast for 2015 to 1.56 percent, from 3.28 percent, after exports slumped for a sixth month.

Singapore shares fell 1.1 percent to a more than six-month low on the back of China-related concerns and pulled lower by a meltdown in major rig builders. Sembcorp Marine and Keppel Corporation tumbled 5.6 and 2 percent, respectively, due to the fall in crude oil prices.

Meanwhile, Thailand's benchmark SET index eased 0.6 percent as apprehensiveness lurked following Monday's deadly bomb explosion in central Bangkok. According to Thai police, an arrest warrant has been issued for a foreigner believed to be responsible for the fatal bombing.