Asian stock markets mostly declined Thursday as the Federal Reserve's limited help to bolster the domestic economy disappointed some market participants.

Hong Kong's Hang Seng declined 1.30 percent or 253.78 points to 19,265.07, Chinese Shanghai Composite fell 1.40 percent or 32.00 points to 2,260.88 and South Korean KOSPI fell 0.79 percent while Japanese benchmark Nikkei gained 0.82 percent or 98.31 points to 8,824.07 and Indian benchmark BSE Sensex gained 0.58 percent.

The Federal Reserve decided to extend its Maturity Extension Program (MPE), also known as Operation Twist, till the end of the year rather than let it expire at the end of this month due to the weakening economic outlook. The Fed's announcement disappointed some investors who had been hoping for a new large scale asset purchase program (QE3).

The extension of the Operation Twist will buy more time for the policy makers to evaluate the incoming data and it has the advantage of not expanding the Fed's balance sheet while some analysts believe the Twist is not a particularly strong tool to revive the domestic economic growth.

The decision by the Fed to extend its maturity extension program through year end by $267 billion left markets with a taste of disappointment. Although the Fed noted that it was 'prepared to take further action' it was clear that FOMC members were resistant to such action at this point in time, said a note from Credit Agricole.

The Fed also left interest rates unchanged 0.25 percent as it sharply lowered expectations for the U.S. economic expansion. The Fed currently expects the U.S. economic growth this year to be in the range of 1.9 to 2.4 percent, down from an April estimate of 2.4 percent to 2.9 percent.

Chinese stock markets plunged, led by declines from energy and financial sector companies' shares, after the private sector showed that country's manufacturing activity fell in June compared to that in May and continued to shrink for the eighth straight month.

The HSBC Flash Purchasing Managers Index (PMI), a measure of the nation-wide manufacturing, declined to 48.1 in June compared to 48.4 in May, raising concerns about the weak global demand and diminishing real estate investment in the world's second largest economy.

Among the stocks, Bank of Communications declined 1.92 percent and China Life Insurance Co. slipped 1.52 percent while China Coal Energy Co and CNOOC Ltd plunged more than 3.23 percent.

Property developers also declined as Evergrande Real Estate Group Ltd slumped more than 11.38 percent after the company was targeted by a report from short-sale specialist Citron Research, Reuters has reported. China Resources Land plunged 5.32 percent and Agile Property Holdings declined 4.55 percent.

Japanese stock market advanced for the second day, led by gains from exporter companies' shares on a weaker yen.

Among the exporters, Canon Inc gained 1.39 percent and Toyota Motor advanced 1.15 percent while Nissan Motor gained 1.87 percent.

Honda Motor surged 3.45 percent after Credit Suisse raised its price target on the shares to 3,400 yen from 3,150 yen. The company stock was also upgraded to buy rating from neutral rating at Nomura Tuesday.

Federal reserve Credit Suisse HSBC Toyota