Shares in department store Myer rallied over 4 percent after data showed Australia's retail sales were up 0.5 percent in July, beating analyst forecasts for a 0.3 percent rise. June sales fell 0.1 percent.
"It's a little bit of relief," said David de Garis, senior economist at National Australia Bank.
"It's not exactly shooting the lights out, but at least it didn't deteriorate further."
Also supportive was a rise in China's official purchasing managers' index. See . The index had previously fallen to a 28-month low.
"We watch the Chinese data for reassurance that they are headed for a soft landing," said Phillip Weinberg, dealer at Karara Capital in Melbourne.
The benchmark S&P/ASX 200 index was up 48.3 points at 4,345.7 by 0219 GMT. It rose 0.6 percent on Wednesday.
New Zealand's benchmark NZX 50 index rose 0.4 percent to 3,334.8.
"The US market has come back to flat for the year and our market is down almost 10 percent so we certainly lag behind and may play a bit of catch up," said Weinberg.
Moody's Investors Service said the outlook for Australia's corporate sector was stable, with revenue and earnings growth "to prevail", helped by demand for commodities, and high employment.
STOCKS ON THE MOVE:
Department store Myer rose over 4 percent to a one-week high of A$2.24 after the retail report. Woolworths rose 1.9 percent, David Jones 3 percent, and clothing store Billabong BBG.AX. 2.6 percent.
Top banks gained, led by a 1.9 percent rise in National Australia Bank , following share gains in Europe and the United States
Telstra Corp rose 1.5 percent to A$3.075 after an independent expert said shareholders will be A$4.7 billion ($5 billion) better off under its plan to hand over its fixed-line infrastructure. See:
Building-materials firm CSR Ltd fell 5.4 percent to A$2.45 on plans to lower production at its Viridian glass business. It forecast first-half net profit growth of around 10 percent.
Rio Tinto rose 1.5 percent to A$73.63. It said former chief financial officer of arch rival BHP Billiton , Chris Lynch, will join the board.
Contractor Leighton Holdings rose 2 percent to A$20.68. Leighton said on Thursday it would vigorously defend any shareholder class action claim, although it had not yet been served with one. Local media reports said legal firm Maurice Blackburn planned to launch a class action against the company in relation to a profit downgrade in April.
Copyright Reuters, 2011