Asian stock markets advanced for the third straight session Wednesday as sentiment continued to improve on hopes that the major central banks around the world would soon announce a new round of stimulus measures to spur economic growth.

Japan's benchmark Nikkei gained 0.88 percent or 77.85 points to 8,881.16, South Korea's KOSPI Composite advanced 0.87 percent or 16.43 points to 1,903.23 and India's benchmark BSE Sensex rose 0.25 percent while Chinese Shanghai Composite gained 0.16 percent or 3.37 points to 2,160.99 and Hong Kong's Hang Seng ended flat.

Sentiment was positive during the Asian trading hours as investors remained optimistic that the ECB would shortly take policy action to lower the peripheral bond yields of struggling nations such as Italy and Spain. Meanwhile, the majority of economic data released overnight from the single currency region was weak. However, the markets continued to gain despite weak economic data as hopes of further policy action from the ECB offered support.

The preliminary estimate of the Italian GDP for the second quarter showed that the third largest euro zone economy contracted for the fourth straight quarter. The GDP contracted by 0.7 percent in second quarter, bringing the annual rate of return to -2.5 percent. German factory orders declined 1.7 percent in June after rising 0.7 percent in the previous month.

Sentiment was also supported on renewed hopes of policy action from the U.S. after a Federal Reserve official called for additional central bank stimulus. Federal Reserve Bank of Boston President Eric Rosengren said Tuesday that the Fed should launch an aggressive open-ended bond buying program to boost the economy until unemployment begins falling again, the Wall Street Journal Reported.

Meanwhile, investors turned their attention to Asia as the world's second largest economy will release its monthly data pack later this week and investors are looking for signs of improvement after China's recent pro-growth measures. The Bank of Korea (BOK) is also expected to cut the repurchase rates from 3.00 percent to 2.75 percent when they meet Thursday to review monetary policy.

"The immediate focus is now on growth and the key litmus test this week will be provided by Chinese data, which needs to show a convincing sign of recovery from a sluggish first half in order to sustain the renewed appetite for risk," Kim Byung-yeon, an analyst at Woori Investment & Securities, told Reuters.

Japanese shares advanced, led by gains from exporter companies' shares on weaker yen. Advantest Corp. surged 3.15 percent and Sharp Corp. rose 2.73 percent while Sony Corp. rose 0.88 percent.

Resource companies' shares went up across the region. Inpex Corp. gained 1.32 percent and Kobe Steel Ltd. surged 4.35 percent in Tokyo while PetroChina Co Ltd. advanced 1.14 percent and China Coal Energy Co. rose 1.94 percent in Hong Kong.

Standard Chartered Plc gained 1.40 percent after slumping more than 16 percent in the previous session on news that the bank might be suspended from doing business in New York after the firm was accused by the state authorities of handling more than £250bn in transactions with Iranian banks that violated U.S. money laundering laws.