Asian stock markets advanced Friday as sentiment was buoyed following the release of improved economic data in both the U.S. and China.

Japanese benchmark Nikkei climbed 2.86 percent or 303.66 points to 10,913.30, Hong Kong's Hang Seng surged 1.09 percent or 254.29 points to 23,594.05 and Chinese Shanghai Composite surged 1.41 percent or 32.16 points to 2,317.07, while South Korea’s KOSPI Composite gained 0.69 percent and Indian benchmark BSE Sensex gained 0.52 percent.

The official data released by the National Bureau of Statistics Friday showed that the Chinese economy expanded at a faster rate than expected in the fourth quarter of 2012, suggesting a revival in economic growth momentum of the country. China's Gross Domestic Product (GDP) grew at 7.9 percent on an annual basis in the October-December quarter, up from 7.4 percent growth reported in the third quarter and also topped analysts’ expectation of 7.8 percent.

Meanwhile, reports on retail sales and industrial production also came in above the consensus. China’s industrial production rose to 10.3 percent in December compared to 10.1 percent in November and also more than Reuters' expectation of 10.1 percent, while retail sales rose 15.2 percent in December on an annual basis, up from 14.9 percent in November and above the analysts’ estimate of 14.9 percent.

Sentiment was further supported by the improved U.S. economic data overnight. Housing starts surged 12.1 percent to a seasonally adjusted annual rate of 954,000 units in December, the highest level since June 2008, while weekly jobless claims also fell to a five-year low.

"The Chinese data, along with signs of recovery in the United States and relative calm in the euro zone give a sense of stability to markets and raise hopes for stronger demand for key materials, as the focus shifts to fundamentals,” Tomomichi Akuta, senior energy researcher at Mitsubishi UFJ Research and Consulting in Tokyo, told Reuters.

Japanese stocks rallied as the yen weakened further against the dollar and the euro on hopes that the Bank of Japan will initiate stimulus measures at its policy meet early next week. Honda Motor Co Ltd. surged 3.15 percent and Sony Corp. climbed 12.21 percent, while Advantest Corp. rallied 8.15 percent.

Financial and resource related shares led the gains in Hong Kong. China Merchants Bank Co Ltd. gained 2.11 percent and China Minsheng Banking Corp Ltd. surged 3.61 percent, while PetroChina Co Ltd. and Aluminum Corp of China Ltd. advanced 2.20 percent and 2.60 percent, respectively.

In Seoul, Hyundai Motor Co. advanced 0.47 percent and Woori Finance Holdings Co Ltd. surged 3.77 percent, while Samsung Electronics Co Ltd. rose 0.75 percent.