HONG KONG — Asian stocks rose Friday as upbeat U.S. economic data lifted investors' spirits following days of stomach-churning turbulence sparked by a heavy sell-off in China.
Japan led regional gains, but Shanghai shares were not far behind as markets took their lead from Wall Street, where benchmarks had a strong finish after a government report showed that U.S. second-quarter economic growth was much stronger than initially estimated. The growth data, which also helped oil prices stage an impressive rebound, gave added encouragement to investors seeking bargains in beaten-down shares.
Japan's benchmark Nikkei 225 index climbed 3 percent to 19,124.85 after lackluster monthly data on inflation and household spending raised hopes of further stimulus.
The Shanghai Composite Index in mainland China rose 2.1 percent to 3,149.35, adding to its 5.3 percent gain Thursday, which was its first increase in six days, during which it shed nearly 23 percent.
World stock markets are returning to calm after the tumult of the past two weeks, which saw Chinese stocks plunge, wiping out gains for the year, on jitters over the economy and a surprise devaluation of the yuan. Analysts warn there may be further volatility ahead.
"Uncertainties regarding China and the emerging world are likely to linger and uncertainty still remains around the Fed," said Shane Oliver, head of investment strategy at AMP Capital.
However, he added that he believes markets have bottomed out and a "cyclical bull market" is likely to resume. "Despite the recent set-back, share markets are likely to remain in a broad rising trend," he said.
Recent market turmoil has thrown into doubt expectations for a Federal Reserve interest rate hike in September, with most economists now saying it's off the table for now. Fed officials hold their annual meeting at Jackson Hole, Wyoming, this weekend, which will be heavily scrutinized for clues on the rate hike timing.
South Korea's Kospi climbed 1.5 percent to 1,937.16 while Hong Kong's Hang Seng added 0.7 percent to 21,984.11. Australia's S&P/ASX 200 gained 0.5 percent to 5,259.00.
On Wall Street, the Dow Jones industrial average climbed 2.3 percent to close at 16,654.77, recouping nearly half of its losses over the past two days following a sharp six-day slump. The S&P 500 index gained 2.4 percent to 1,987.66 and the Nasdaq composite rose 2.5 percent to 4,812.71.
The dollar slipped to 121.09 yen from 121.12 in late trading Thursday. The euro climbed to $1.1254 from $1.1242.
Benchmark U.S. crude oil extended gains, rising 68 cents to $43.24 in electronic trading on the New York Mercantile Exchange. On Thursday the contract posted its biggest one-day gain in six years, leaping $3.96, or 10.3 percent, to $42.56 a barrel. Brent crude, a benchmark for international oils imported by U.S. refineries, rose 74 cents to $48.34 in London.