Asia stocks mixed after European bank stress tests

Asian stocks closed mixed after most of Europe's largest banks passed a stress test aimed at checking the strength of the region's financial system.

The European Banking Authority looked at 123 EU banks to test if they could withstand another financial crisis - 24 failed, but 10 have already taken steps to strengthen their balance sheets.

Japan's benchmark Nikkei closed 0.6% higher, while the Topix gained 1%.

South Korea's Kospi rose 0.3% and and Australian stocks gained 0.9%.

New Zealand's stock market was closed for a labour day holiday.

"Markets are more on a 'relief bounce' than a 'risk on' rally per se," Vishnu Varathan from Mizuho Bank wrote in a research note, saying the ECB's stress test was "arguably not as bad as feared" and "should preserve market stability".

Investors will now be looking ahead to the US central bank's meeting on Tuesday and Wednesday.

The Federal Open Market Committee (FOMC) is expected to end its monthly asset purchase programme and maintain interest rates at a record low.

Stock Connect

Chinese stocks failed to join the relief rally after the much-anticipated Shanghai-Hong Kong Stock Connect was delayed.

Both Hong Kong's Hang Seng and the Shanghai Composite ended lower, 0.8% and 0.5% respectively, because of uncertainty over the scheme, which would allow investors to trade on each others markets.

Shares in Hong Kong Exchanges and Clearing (HKEx) also fell by their most in six months after its chief executive Charles Li said the landmark link-up had not yet won regulatory approval.

"There have been market expectations that Stock Connect will commence its operation in October 2014," HKEx said in a statement on Sunday.

"To date, the parties are technically ready to implement Stock Connect. However, at the date of this announcement, HKEx has not received the relevant approval for the launch of Stock Connect, and there is no firm date for its implementation."