Asia stocks rise after Wall Street rally

File photo of a pedestrian look at the Tokyo stock market numbers. (AFP/Toru Yamanaka)

Investors shrugged off figures from the world's second largest economy showing retail sales growth slowed, instead tracking US markets where all three major indices vaulted to new records.

Oil prices also extended overnight gains in Asian trade after Saudi Arabia's oil minister hinted that crude producers may take action to rebalance the market.

"Asia Pacific markets are set to finish the week on a high following strong leads from European and US investors," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an email commentary.

"Industrial commodities rose, led by oil, and overnight trading displayed 'risk on' characteristics despite the lack of an obvious trigger."

The US highs - last seen among the leading indices in 1999 - came amid strong gains in petroleum-linked shares and retailers, while European stocks also pushed higher thanks to accommodative central bank policies lending continued support to equities.

Among the performers was China's New York-listed e-commerce behemoth Alibaba, which reported sales of 32.15 billion yuan (US$4.83 billion), 59 per cent higher than a year ago and above analyst expectations.

Tokyo closed at its highest level in more than two months, rising 1.1 per cent after having been closed Thursday for a national holiday. Sydney gained 0.4 per cent, while Kuala Lumpur was up despite figures showing Malaysia's economic growth slowed in the second quarter.

Shanghai and Hong Kong also surged - rising 1.6 per cent and 0.8 per cent respectively even as China data disappointed.

Government figures released Friday showed that retail sales in the Asian powerhouse rose 10.2 per cent year-on-year in July, a sharp slowdown from the 10.6 per cent increase in June and below the median forecast of a 10.5 per cent rise in a Bloomberg News poll of economists.

Also missing expectations was factory output, which increased 6.0 per cent in July over the year before, and fixed asset investment, a gauge of infrastructure spending, which rose 8.1 per cent in the first seven months of the year.

Industrial output had been expected to show 6.2 per cent growth and fixed asset investment 8.9 per cent growth.

"Though the economic data are weak, they are still within an acceptable range to investors," Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co told Bloomberg News.

The National Bureau of Statistics said in a statement China's economy was "basically steady" in July but that "serious disasters" from flooding and high temperatures in some parts of the country caused some indicators to slow.

Beijing is looking to retool the economy from a reliance on investment spending and exports to one driven more by consumer demand, but the transition is proving bumpy and gross domestic product growth expanded last year at its slowest rate in a quarter of a century.

OIL REBOUNDS

Energy stocks were among those seeing gains after the oil price rebounded.

Hong Kong-listed CNOOC rose 3.2 per cent while Santos added almost 4 per cent in Sydney and Formosa Chemical Corporation also advanced 2.9 per cent in Taipei.

Oil, which had entered a "bear" market last week, dropped Wednesday after US data showed crude stocks remained high and a report from the Organization of the Petroleum Exporting Countries revealed Saudi Arabian oil production had risen last month to nearly 11 million barrels per day.

But in remarks reported Thursday, Saudi oil minister Khalid al-Falih hinted producers could agree to cut output next month at an informal OPEC meeting.

"His enchanting words sent equity markets into a froth," said Stephen Innes, senior trader at OANDA Asia Pacific.

"Despite signals pointing to a potentially enormous bulge in crude stocks for 2017, there appears to be no taming of the oil market bull when OPEC speaks."

In early European trade, London was up 0.2 per cent, Paris was flat while Frankfurt was down 0.4 per cent.

KEY FIGURES AT AROUND 0900 GMT

Tokyo - Nikkei 225: UP 1.1 per cent at 16,919.92 (close)

Shanghai - Composite: UP 1.6 per cent at 3,050.67 (close)

Hong Kong - Hang Seng: UP 0.8 per cent at 22,766.91 (close)

Euro/dollar: UP at US$1.1153 from US$1.1138 Thursday

Pound/dollar: UP at US$1.2958 from US$1.2955

Dollar/yen: UP at 102.04 yen from 101.95 yen

New York - DOW: UP 0.6 per cent at 18,613.52 (close)

London - FTSE 100: UP 0.2 per cent at 6,925.31