* MSCI Asia Pacific ex-Japan index gains 1 pct
* China Q2 GDP growth slows to 9.5 pct, still beats market estimates
* European markets open weaker
* Fed Chairman’s two-day testimony to Congress starts on Wed (Adds more quotes, updates prices)
By Anshuman Daga
SINGAPORE, July 13 (Reuters) - Asian equities, metals and commodity currencies rallied on Wednesday as investors piled into risky assets after China’s economic growth data reassured markets that the world’s second-largest economy was maintaining its growth momentum.
The euro found some reprieve from a plunge since the start of the week and Australian dollar gained 0.3 percent to $1.0630 as the data comforted market participants fretting that the euro zone debt crisis could spiral out of control.
European stock markets opened weaker with the FTSEurofirst 300 index of top European shares down 0.3 percent, its fourth straight day of falls.
China’s annual gross domestic product grew 9.5 percent in the second quarter of 2011, above 9.4 percent forecast by a Reuters poll, as a spate of monetary tightening measures from Beijing begins to take effect.
Retail sales in China grew 16.8 percent in the six months ended June, showing that domestic demand still held up relatively well despite policy tightening, China’s statistics bureau said.
“What today’s numbers are telling us is that higher rates are not having a sharply negative impact. We’ve seen the economy ratchet down a gear,” said Adrian Foster, head of Asia Pacific financial markets research, at Rabobank in Hong Kong.
China’s GDP has grown expanded at an average annual pace of 10 percent in the past three decades and has in recent times underpinned a fragile U.S. economy as Europe struggled with debt problems.
The MSCI index of Asia-Pacific shares outside Japan rose 1.1 percent by 0610 GMT, with stock markets in Australia, and South Korea up 0.4 percent and 0.9 percent respectively. The Nikkei advanced 0.4 percent.
The euro stabilised around $1.3990 , after Tuesday’s wild swings that took it to a four-month low around $1.3838 , with the news that Moody’s cut Ireland’s credit rating to junk status adding salt to its wounds.
The currency has managed to stay more than 1 percent above a four-month low against the dollar and kept some distance against the Swiss franc in Asia, as falls in Italian and Spanish bond yields after their surge to 14-year highs on Tuesday have put the brakes on selling of the single unit.
The Japanese yen, which has benefited from the euro’s woes, hit a four-month peak against the dollar and many other currencies in thin, early Asian trade, but it then stepped back from highs in line with an easing in overall risk aversion trade.
The European Banking Authority will publish stress test results for 91 of the region’s top lenders on Friday, keeping euro bulls in check.
“The euro is going to remain under downward pressure until we get some clarity,” said Richard Grace, chief currency strategist at Commonwealth Bank in Sydney, adding it could fall to $1.3659 in coming days.
Against the safe-haven Swiss franc, the common currency stood at 1.1640 franc , having plumbed a record low of 1.1555 on Tuesday.
European Union leaders appear set to hold an emergency summit on Friday after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens’ debts and stop contagion spreading to Italy and Spain.
“We think the worst fears will not be realized in Europe. This is an ongoing grind rather than an implosion.” said Rabobank’s Foster.
Some dollar bulls are also wary ahead of Federal Reserve Chairman Ben Bernanke’s semi-annual testimony on the economy and monetary policy before the House Financial Services Committee starting at 1400 GMT.
Hong Kong stocks advanced 1.0 percent, supported by a 4.5 percent rise in Agricultural Bank of China’s on strong earnings forecast. Risky assets have taken a beating this week on growing worries that Greece’s debt crisis could lead to more countries requiring financial aid.
The Hong Kong benchmark is coming off its worst two-day decline in 17 months on the back of a sluggish banking sector, a worsening euro zone debt crisis and a Moody’s report that re-ignited fears about Chinese corporate governance.
Copper on the London Metal Exchange extended early gains after the Chinese data, and was up 0.5 percent at $9,698 a tonne.
Spot gold was steady at $1,565 per ounce, while Brent for August LCOc1 fell 40 cents to $117.35 a barrel. (Additional reporting by Hideyuki Sano in TOKYO; Editing by Ramya Venugopal)