Asian stock markets advanced for the first time in five days Thursday as disappointing U.S. housing data boosted hopes for further monetary stimulus from the Federal Reserve.

Japan's benchmark Nikkei gained 0.92 percent or 77.20 points to 8,443.10, Hong Kong's Hang Seng advanced 0.08 percent or 15.46 points to 18,892.79 and South Korea's Seoul Composite gained 0.74 percent or 13.16 points to 1,782.47 while Chinese Shanghai Composite fell 0.47 percent and India's benchmark BSE Sensex slipped 0.23 percent.

The U.S. new home sales, which measure the annualized number of new residential buildings that were sold during the previous month, fell 8.4 percent to an annual rate of 350,000 in June compared to the prior month, the biggest drop in more than a year. The data also fell short of Reuters' estimate of 370,000 units.

The recent batch of disappointing economic readings from the U.S., including a slowdown in job creation, intensified fears that the strength of economic recovery in the world's largest economy is losing steam. However, investors are optimistic that the weak economic data, coupled with intensifying crisis in the euro zone, will force policy makers to announce further monetary easing.

Sentiment was also boosted after European Central Bank Governing Council member Ewald Nowotny suggested that the Europe's permanent rescue fund could be given a banking license. Meanwhile, concerns over hard landing fears in China eased after an IMF official commented that measures announced so far in the world's second largest economy are sufficient to support growth.

"Talk of granting the ESM a banking licence boosted hopes for more policy measures out of Europe, which is always welcome in Emerging Markets. Also, it seems like the market is unwilling to go further negative on rising hopes for more stimulus, with the logic being that the worse the economic outlook, the more likely policy makers are to do more to support growth," said a note from Credit Agricole.

However, the upward was limited after official data showed that South Korea's economic grew at a slower pace than expected in the second quarter. Gross domestic product slowed to 0.4 percent in the second quarter compared to previous three months and also fell short of market expectations for 0.5 percent growth. On annual basis, economy expanded 2.4 percent in the April-June period.

Among the stocks, Nintendo Co Ltd surged 3.19 percent and Fanuc Corp. climbed 5.32 percent while Nomura Holdings Inc. rallied 5.71 percent. Canon Inc. slumped 7.7 percent after the world's largest camera maker lowered its outlook for fiscal year due to stronger yen and expectations for weaker global growth.

Property developers' shares led the gains in Hong Kong. However, gains were offset by declines from casino shares after Las Vegas Sands Corp quarterly earnings fell short of expectations.

China Resources Land Ltd. gained 1.09 percent and China SCE Property Holdings Ltd. surged 2.87 percent while Sands China Ltd plunged 4.72 percent and Galaxy Entertainment Group Ltd. fell 2.44 percent.

In Seoul, KB Financial Group advanced 2.42 percent and LG Electronics rallied 6.60 percent while Hyundai Motor rose 1.59 percent.