World stocks hit 10-month highs for a second day running on Friday after euro zone growth data in the previous session and positive earnings from the world's largest retailer also boosted sentiment.

Germany and France, the euro zone's two biggest economies, both reported 0.3 percent second-quarter growth on Thursday, ending their recessions earlier than expected.

European stocks also took their cue from Wall Street, where better than expected earnings by Wal-Mart Stores Inc helped offset weak U.S. data on retail sales and jobs.

The positive figures out of Germany and France are still a favorable factor for the market, though such prospects had been somewhat priced in during the global market rally over the past month, said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo.

The MSCI world index <.MIWD00000PUS> gained over 0.2 percent to 273.20, its best showing since mid-October 2008.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares rose 0.56 percent, approaching the previous session's nine-month high.

World stocks have rallied more than 2 percent in the past three days, after the U.S. Federal Reserve said this week the U.S. economy was showing signs of leveling out and it moved to phase out one emergency measure.

There's still an ongoing reaction to Wednesday's statement from the Fed that the economy is stabilizing, said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

Investors are becoming less cautious as they see an end to the global recession.

Oil prices rose for the third consecutive day, toward $71 a barrel.

However, Chinese stocks <.SSEC> slid 3 percent to their lowest close in six weeks and posted their biggest weekly drop in five months, with financial shares weak as worries about additional share supplies weighed on the market.

Losses in Chinese shares are hampering higher-risk markets. Emerging stocks <.MSCIEF> rose 0.4 percent, but held below recent 11-month highs.

The yen rose against the euro and dollar, its safe-haven status boosted by the Chinese stock losses.

The yen gained around 0.20 percent against the dollar to 95.20 and 0.35 percent against the euro to 135.87.

The euro was steady against the dollar at $1.4272. Euro zone government bond futures hit a one-week high, tracking U.S. Treasuries after a well-received 30-year U.S. Treasury auction on Thursday. The Bund future was up 43 ticks.

(Additional reporting by Umesh Desai in Hong Kong and Brian Gorman in London, editing by Mike Peacock)

Germany Retail sales