Asian stocks ended mixed on Thursday as a drop in U.S. producer prices fueled hopes of Federal Reserve rate cuts and helped offset rising geopolitical tensions and widespread political turmoil in South Asia.

Federal Reserve policymakers look all but certain to reduce short-term borrowing costs by a modest quarter of a percentage point at their policy meeting next week, but a half-point cut might become a real possibility if U.S. core CPI data due later in the day underwhelms.

Consensus estimate show that the headline CPI likely rose 2.9 percent from a year earlier in August, the fastest pace since January, while the core measure likely held at 3.1 percent.

China's Shanghai Composite index climbed 1.65 percent to 3,875.31 on renewed optimism about artificial intelligence technology.

However, pharma stocks tumbled following reports that the Trump administration is considering new curbs on imports of experimental pharmaceuticals.

Hong Kong's Hang Seng index dipped 0.43 percent to 26,086.32 on profit taking after recent strong gains to a four-year high amid expectations for improved earnings growth and policy support from Beijing.

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