In India, the benchmark BSE Sensex struck a record high on 9 December and the rupee hit a four-month high after the main opposition party, the Bharatiya Janata Party (BJP), perceived to be more business-friendly, swept three out of four key state elections.
Nomura said in a note to clients: "The BJP is considered more right-of-centre, pro-business and reform-oriented. The fact that runaway spending by the ruling party has not won any votes could be taken as a very positive signal by the markets in terms of voter preference for the kind of policy favoured by the electorate."
Earlier, data from the US showed that the number of out of work Americans dropped to its lowest level in five years in October, after some federal workers, who were counted as jobless in October, returned to work following a 16-day partial shutdown of the government.
Markets retreated in subdued trade on 10 December as market players took in a raft of Chinese economic data and disregarded a record close on Wall Street.
China's industrial production rose 10% on an annual basis in November, broadly in line with market consensus, and followed a 10.3% increase in October.
Meanwhile, China's November retail sales rose 13.7% year-on-year, beating expectations. Fixed asset investment rose 19.9% between January and November in line with market consensus.
Markets took a beating on 11 December after investors took profits amid the interest rate liberalisation pressure that weighed down Chinese banking stocks.
News that US politicians had reached a provisional two-year deal to prevent another federal shutdown failed to boost regional sentiment.
In China, the big four state-owned banks and a former state policy bank decided to issue 19bn yuan ($3.13bn) of negotiable certificates of deposit, the official Shanghai Clearing House said. The action is another measure in Beijing's move toward liberalised interest rates.
Earlier, data from India showed that November exports rose 5.86% on an annual basis, while imports fell 16.37%. The country's November trade deficit was $9.22bn as against $10.56bn in the preceding month.
In the US, a cross-party Congressional budget committee agreed to fund government services for another two years. The proposed deal would finance the government, which is expected to run out of funds on 15 January, and would reduce the federal deficit by $23bn (£14bn, €17bn).
Asian stock markets slid to two-and-a-half month lows on 12 December on fears that the US Federal Reserve could trim its massive monthly bond buying stimulus sooner than expected.
In South Korea, the Bank of Korea left its base rate unchanged at 2.5%, as was widely expected.
In New Zealand, the Reserve Bank of New Zealand left its cash rate unchanged at 2.5%. However, the central bank reiterated it expects to raise rates in 2014 to deal with rising inflation pressures from the housing and building sectors.
Asian markets witnessed mixed trade on 13 December as speculation about the timing of the expected reduction in the Fed's bond buying stimulus weighed on investor sentiment.
Upbeat US retail sales data fuelled speculation that the Fed could trim its $85bn-a-month bond buying programme as early as next week.
In Tokyo, exporters' stocks gained after the yen dropped to near five-year lows against both the euro and the US dollar.
News that Japan's cabinet approved $53bn in fresh stimulus, aimed at mitigating the blow of a sales tax-hike next April, also supported market sentiment.
In India, equities were pulled down by disappointing economic data. Industrial output shrank 1.8% on an annual basis in October, a first in four months, suggesting that the economic recovery in Asia's third-largest economy continues to remain weak.
Meanwhile, inflation data from India showed that prices rose 11.2% in November, the highest rate of increase in two years.
Credit Agricole CIB said in a note to clients: "The INR should come under further downward pressure in coming days after very negative data out of India late last night. [Industrial output data] highlights the weakness of domestic demand and output and we expect growth to continue disappointing in quarters to come.
"After such print and statement, [RBI Governor Rajan] now has to hike rates next week - hurting growth outlook, or loose credibility, both of which would be INR-negative. The government is bound to pressure him not to do so given the unfavourable growth impact ahead of H114 elections, and we expect the INR to keep falling", the French bank added.
The Japanese Nikkei index ended 0.97% higher at 15,403.11.
South Korea's Kospi finished 0.99% lower at 1,962.91.
India's S&P BSE Sensex finished 1.15% lower at 20,715.58.
Australia's S&P/ASX 200 finished 2.09% lower at 5,098.40.
The Shanghai Composite index ended 2.12% lower at 2,196.07.
Hong Kong's Hang Seng ended 2.73% lower at 23,245.96.
The Week Ahead
Market participants will be tracking the Fed's FOMC meeting next week and await the central bank's monetary policy decision, due on 18 December.
The markets fear that the Fed could trim its $85bn-a-month bond buying stimulus next week. The asset buys have supported the world's leading economy and the markets the world over.
Barclays Research said in a note to clients: "We expect the FOMC will make no changes to its asset purchase program and policy rate guidance at next week's meeting. We believe many FOMC participants will need more evidence that the rate of growth is accelerating and inflation is firming before slowing the pace of purchases. We believe the FOMC will discount the strong headline Q3 growth outturn due to the significant inventory contribution and expect it will wait until March before tapering".
In China, the government will put out year-to-day FDI investment data.
HSBC will release preliminary China manufacturing PMI data for the month of November.
The Bank of Japan will announce its interest rate decision and release the results of several Tankan surveys.
The Japanese government will release merchandise trade balance data for the month of November, alongside foreign equity and bond investment numbers for the month of December
The Reserve Bank of Australia will release the minutes of its latest policy meeting.
New Zealand will publish third-quarter GDP data.
Westpac will put out the results of its New Zealand consumer survey, and ANZ will release the results of its New Zealand business confidence survey.
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