Asian stock markets declined Thursday as weak economic reports from Japan and China weighed on the sentiment.

Japanese benchmark Nikkei plunged 1.57 percent or 145.23 points to 9,086.98, Hong Kong's Hang Seng declined 1.20 percent or 250.99 points to 20,590.92 and Chinese Shanghai Composite tumbled 2.08 percent or 42.99 points to 2,024.84 while South Korean KOSPI Composite declined 0.87 percent and Indian benchmark BSE Sensex slipped 0.62 percent.

Official data Thursday showed that Japan recorded a trade deficit of 754.1 billion yen ($9.6 billion) in August compared to a deficit of 518.9 billion yen in July as exports fell for a third straight month in the year in August. Exports dropped 5.8 percent to 5.05 trillion yen in August from a year earlier, mainly hurt by the sovereign-debt crisis in Europe and a slowdown in China.

Exports to the European Union slumped 22.9 percent compared to the previous year as the continuing debt crisis in Europe and the strength of the Japanese yen have hurt the demand for exports, the key driver of Japan's economy. Exports to China declined 9.9 percent while exports to the U.S. rose 10.3 percent.

The HSBC Flash Purchasing Managers Index (PMI), a measure of the nation-wide manufacturing, gained to 47.8 in September, after hitting nine-month low of 47.6 in August, soothing worries about a sharp growth slowdown in the world's second-largest economy.

“China’s manufacturing growth is still slowing, but the pace of slowdown is stabilizing. Manufacturing activities remain lackluster, thanks to weak new business flows and a longer than expected destocking process. And this is adding more pressures to the labor market and has prompted Beijing to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from 4Q onwards,” Hongbin Qu, chief China economist and co-head of Asian economic research at HSBC, said in a note.

However, the reading is still below the 50 level, signifying the contracting economic activity and suggesting that the world's second-biggest economy is on track for a seventh quarter of slowing growth in the third quarter this year.

“This is a sign the slowdown in Chinese manufacturing activity is halting and stabilizing. Market reactions may suggest they want to see some sort of steps to support the economy from authorities, which are seen as slow to take action,” Hirokazu Yuihama, a senior strategist at Daiwa Securities, told Reuters.

Japanese shares plunged, led by declines from the exporter companies. Sony Corp. plunged 4.55 percent and Toyota Motors fell 1.38 percent while Canon Inc. plunged 3.15 percent.

Property developers declined in Hong Kong after Chinese Manufacturing data. Henderson Land Development Co Ltd. plunged 3.39 percent and Sun Hung Kai Properties Ltd. fell 1.68 percent in Hong Kong while New China Life Insurance Co Ltd. tumbled 7.17 percent in Shanghai.

Energy sector shares went down across the region as crude oil future plunged to a six week low of $91.98 a barrel on New York Mercantile Exchange Wednesday. CNOOC Ltd. plunged 3.83 percent and PetroChina Co Ltd. declined 0.98 percent in Hong Kong while Inpex Corp plunged 3.52 percent in Tokyo and S-Oil Corp. fell 3.24 percent in Seoul.