By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Asian stock markets rose Monday after data showed China's economy grew in line with expectations in the second quarter, belying some fears of a sharper slowdown.

The Shanghai Composite climbed 1% and the Shenzhen Composite soared 2.3% to front the region's stock advances, after data from the National Bureau of Statistics put the quarterly gross domestic product growth at 7.5%.

Other economic data released Monday also helped ease some worries, with June retail sales, in particular, rising a better-than-expected 13.3%.

The GDP growth figure -- although weaker than the 7.7% expansion recorded in the first quarter -- matched expectations in separate surveys of economists by Dow Jones Newswires and Reuters.

The data followed a period of intense debate over the growth trajectory, as analysts worried that the Chinese economy may face more headwinds as Beijing refrained from providing additional fiscal or monetary stimulus.

"After all the conjecture over the weekend, the latest batch of Chinese economic data was largely in line with economist forecasts," said CommSec economist Savanth Sebastian.

"The good news is that retail sales lifted for the fifth consecutive month, and while not at heady 15%-plus growth rates seen a year ago, it still provides a degree of encouragement," Sebastian said.

The gains in Shanghai also came after China's Xinhua news service -- which had late last week cited Finance Minister Lou Jiwei as tipping 7% growth for 2013 -- corrected its story over the weekend. The corrected report said the minister had actually indicated the economy would expand 7.5% this year, in line with the government's official target.

Elsewhere, Hong Kong's Hang Seng Index and Australia's S&P/ASX 200 inched up 0.1% each, while South Korea's Kospi added 0.3%, with all three of them erasing earlier losses in the wake of the Chinese data.

Japanese markets were closed for a holiday.

Several Chinese banks rallied to lead the rebound in Shanghai. China Citic Bank Corp. (CHCJY) climbed 4.3%, while Bank of Communications Co. (BCMXY), or BoCom, rose 1.8%.

The banking-led advance also followed data released by the People's Bank of China after the market close Friday, showing a slowdown in June in total social financing -- the broadest measure of credit in China -- from the level seen in May.

Meanwhile, China's statistics bureau said Monday that the non-performing loan ratio at the country's commercial banks sat at 1%, up slightly from 0.9% in the first half of 2012 but still relatively low.

In Hong Kong, China Resources Enterprise Ltd. , (0291.HK), which has interests from food-and-beverages to retail, climbed 3.3%, while Internet major Tencent Holdings Ltd. (TCEHY) climbed 3.7%, while banks ended on a mixed note.

Meanwhile, the stock performance in Asia followed a third straight week of gains for U.S. equities, after the Dow Jones Industrial Average (DJI) and the Standard & Poor's 500 Index ended at record highs Friday.

Energy producers and banks underpinned the gains in Sydney after the Chinese economic data, with Linc Energy Ltd. soaring 26% after updating investors that it has completed drilling work on a well with a daily production rate of 1,000 barrels of oil equivalent at the Cedar Point Field in Texas.

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