Electronic stock board, Beijing
Trading volumes in Asia were light with Japanese markets shut Stringer/Reuters

Asian stocks headed higher on 22 September following a positive handover from Wall Street. The Shanghai Composite index advanced 0.7% to 3,177.02 points at mid-day, while Hong Kong's Hang Seng benchmark was also up by 0.7% at 21,899.67.

The gains came despite the Chinese Academy of Social Sciences, a top government think tank, predicting China's economic growth to slow to 6.9% in 2015 from 7.3% in 2014. The think tank blamed the slowdown on declining investment by companies and individuals and growing debt pressures faced by local governments, Reuters reported.

Overnight, US stocks recovered from last week's steep losses to close in positive territory, after Atlanta Federal Reserve President Dennis Lockhart affirmed that the central bank is likely to raise interest rates before the end of the year. "In my vote at the recent... meeting, I put most of the decision weight on prudent risk management around recent and current market volatility," he said in a speech at the Buckhead Rotary Club in Atlanta, Georgia.

"As things settle down, I will be ready for the first policy move on the path to a more normal interest-rate environment. I am confident the much-used phrase 'later this year' is still operative," Lockhart added.

The Dow Jones and S&P 500 indices settled 0.8% and 0.5% higher, respectively, while the Nasdaq was flat.

Cautious trading

Analysts said investors were cautious in the wake of the Fed's decision to leave interest rates unchanged at near-zero levels last week.

Xi Jinping
Chinese President Xi Jinping arrives in the US on 22 September for a state visit Reuters

"Underlying cautiousness is likely to underpin trade in Asia today, amid a quiet data calendar," said Bernard Aw, market analyst at trading firm IG in Singapore. "There may be some focus on China President Xi's [Jinping] first state visit to the US. Some of the gains in Chinese markets were attributed to rallies in industrial and technology counters, which was driven by speculation of business deals between US and China during the visit."

Meanwhile, South Korean shares advanced, with the Kospi index rising 0.5% to 1,973.90 points. In Australia, the S&P/ASX 200 was up by 0.5% at 5,091.90. Japanese markets remain closed for public holidays until 23 September.