Advances in the regional bourses came on hopes that the Federal Reserve might delay the tapering of its substantial stimulus measures for the time being after data showing sharp drop in new home sales in July.
The Commerce Department said on Friday that sales of new single-family homes in the US fell sharply 13.4% YoY to 394000 units in July, a lowest level in nine months, casting a shadow over the country's housing recovery. The report could weaken the case for the U.S. Federal Reserve to reduce its support for the economy by trimming monthly bond purchases later this year.
The Federal Reserve is expected to make a decision on the timing of the winding back of its bond purchases at its next policy meeting on September 17 and 18.
Meanwhile, a comment from National Bureau of Statistics spokesman Sheng Laiyun over China's target growth of 7.5% is achievable also underpinned risk sentiments.
The National Bureau of Statistics spokesman Sheng Laiyun commented at a briefing organized by the foreign ministry that China's economy is showing clearer signs of stabilization and positive change, helped by some external improvement, and is on track for the 2013 growth target of 7.5%. A private factory survey reinforced signs of stabilizing in the economy in the third quarter after the government took supportive measures, including scrapping taxes for small firms and accelerating investment in urban infrastructure and railways.
However, gains on the upside were limited as investors awaited sidelines to see durable-goods data from the US to gauge if the country's economic recovery is on track. The Federal Reserve has said it could start tapering its asset-purchase program later in the year, if data continue to improve as expected.
Among Asian bourses, Australian market finished modestly higher, with the benchmark S&P/ASX200 index higher by 0.23% to 5135.40, with bullion, financials and realty blue chips led rally.
Shares of bullion producers climbed up sharply in Sydney, with Newcrest Mining grew by 5.1% to A$13.72, Kingsgate 6.4% to A$2.82 and Perseus 5.8% to A$0.825.
Banking and financial stocks were firmer, with Commonwealth Bank higher by 0.6% to A$72.46, Westpac Banking Corp 0.5% to A$31.63, National Australia Bank 0.2% to A$32.53 and Australia & New Zealand Banking Group 0.8% to A$29.88.
Shares of Macquarie Group rose 0.6% to A$44.89 after Fitch Ratings has affirmed its credit rating on the stocks, despite an expectation there will be a ''modest'' deterioration in the environment facing the investment bank over the next year. The ratings agency pointed out that Macquarie's earnings were more volatile than other commercial banks, but this was offset by the fact it's funding and liquidity was conservatively managed. It said Macquarie's $19.8 billion in liquid assets more than covered all the wholesale debt it would have to roll over in the next year.
Tokyo market finished edge lower due to profit taking from investors. Meanwhile yen appreciation against the greenback to the mid-98 level also prompted investors to lock in gains. The Nikkei Stock Average declined 24.27 points, or 0.18%, to 13,636.28. The benchmark moved in the range of 13586.84-13741.49.
Shares of property-developers were up on reports the Japanese housing market is showing signs of strength due to government stimulus and home buyers seeking to lock in purchases ahead of an expected consumption-tax hike in April. Mitsui Fudosan Co was up 0.97%, Mitsubishi Estate Co rose 0.96% and Sumitomo Realty & Development Co gained 3.52%.
Resona Holdings Inc gained 0.82% after announcing it had requested the government's deposit-insurance agency dispose of its Resona shares as a part of the progress in its repayment of public funds.
China stocks closed sharp higher after the National Bureau of Statistics said the target growth of 7.5% is achievable. The benchmark Shanghai Composite index was up 39.02 points, or 1.9%, to end the day at 2096.47.
Materials and resources companies climbed up sharply in Shanghai. Jiangxi Copper, China's biggest producer of the metal, rising 2.3% to 17.28 yuan. Western Mining Co., the nation's fourth-largest maker of zinc concentrate, added 2.4% to 6.07 yuan. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co gained 1.5% to 29.18 yuan.
Chinese brokerage shares also finished higher. Citic Securities, China's biggest listed brokerage, gained 5.2% to 11.06 yuan. Haitong Securities, the second biggest, jumped 8.1% to 11.35 yuan. Everbright Securities Co. (601788) added 4.2% to 10.25 yuan.
Hong Kong's shares have finished higher on an increase in commodity prices and some hopes the Federal Reserve may delay paring its bond purchases. The Hang Seng Index rose 0.65% and the Hang Seng China Enterprises Index added 1.44%.
Among the 50 HK blue chips, 34 rose and 13 fell, with three stocks remaining steady. China Construction Bank Corp rose 0.69%, footwear major Belle International Holdings climbed 5.57%, coal miner China Shenhua Energy Co jumped 3.68% and refining giant China Petroleum & Chemical Corp added 1.92% after each posted results. Energy major Cnooc rose 0.13% and Jiangxi Copper Co added 0.78% among resource producers.
In India, a divergent trend was witnessed on the bourses as the S&P BSE Sensex provisionally closed with mild gains while the 50-unit CNX Nifty provisionally closed slightly in the red. The market witnessed high intraday volatility as traders roll over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. The S&P BSE Sensex was provisionally up 19.69 points or 0.11%, off about 190 points from the day's high and up close to 50 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The Sensex gained for the third straight day in a row today, 26 August 2013.
Indian index heavyweight and cigarette maker ITC declined. Capital goods pivotal gained. Most metal and mining stocks also gained. Shares of Sesa Goa jumped ahead of its inclusion in the 30-share benchmark S&P BSE Sensex from Tuesday, 27 August 2013. Pharma stocks advanced.
Elsewhere, Taiwan's Taiex rose 0.28%, South Korea's KOSPI added 0.95%, Malaysia's KLSE Composite rose 0.08% and New Zealand's NZX50 climbed 0.47%. Indonesia's Jakarta Composite shed 1.18% and Singapore's Strait Times fell 0.14%.
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