RPT-GLOBAL MARKETS-Asian shares, euro rise after stress tests

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* Asian shares, euro extend rally after European bank tests

* Some investors sceptical over the tests' credibility

* Players awaiting European market reaction to stress tests

By Kazunori Takada

SINGAPORE, July 26 (Reuters) - Asian shares rose and the euro extended gains on Monday as solid U.S. corporate earnings and strong euro zone data offset growing scepticism that stress tests on European banks were not strict enough.

Only seven of 91 banks -- five small Spanish banks, Germany's state-rescued Hypo Real Estate [HRXGe.UL] and Greece's ATEbank (AGBr.AT) -- failed the tests, for an overall capital shortfall of $3.5 billion euros.

Market expectations for the shortfall had ranged from 30 to 100 billion euros, although many European banks have already raised capital during the financial crisis. [ID:nLDE66M1T3] [ID:nLDE66M1A2]

* Asian stocks outside Japan .MIAPJ0000PUS rose 0.3 percent, after rising 1.5 percent on Friday on optimism over U.S. corporate earnings.

* Japan's Nikkei .N225 gained 1.2 percent, extending a 2.3 percent rally in the previous session, while South Korea's benchmark KOSPI .KS11 firmed 0.2 percent.

"With the results of the stress tests, which had been the market's big focus, out in the open, downward factors seem to have run their course for now, even though there's criticism that those tests might have been too easy," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

"The market will likely rise initially and then move narrowly awaiting reaction in Europe with market players keeping an eye on currency moves."

* The euro EUR= gained 0.2 percent in early Asian trade, after rising on Friday on the test outcome and strong euro zone data, including a record jump in German business sentiment in July. [ID:nLDE66M0NL]

* U.S. stocks rose about 1 percent on Friday as GE (GE.N) shares jumped after the U.S. conglomerate increased its quarterly dividend by 20 percent, spurring heavy institutional buying. [.N]

* Australian AUD= and New Zealand dollars NZD= steadied after rallying on the back of risk-taking on Friday, as investors awaited to see the reaction of European markets to the stress tests.

* Crude oil futures CLc1 fell below $79 a barrel as Tropical Storm Bonnie dissipated into a low-pressure system and avoided oil and gas operations in the eastern Gulf of Mexico. (Additional reporting by Aiko Hayahi; Editing by Editing by Tomasz Janowski)