Asian shares extended gains to eight-month highs on Friday, on track for a solid weekly rise, as economic data from China showed better performance and lifted risk sentiment that was already buoyant after record highs on Wall Street.

China’s economy grew 6.7% in the second quarter from a year earlier, steady from the first quarter and slightly better than expected as the government stepped up efforts to stabilise growth in the world’s second-largest economy.

Industrial output and retail sales also beat forecasts, which helped alleviate the fear of slowing momentum, though fixed-asset investment growth slipped and missed market expectations.

Julian Wang, economist for Greater China at HSBC, said, “The data showed the signs of stabilisation, which is very encouraging”.

“However, public sector investment and housing market are slowing down. So the challenges still loom quite large in the second half of the year.”

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.9%, on track to gain more than 5% for the week in which it pushed to levels last reached in November.