Energy shares led a rally across Asian markets Thursday and oil built on the previous day's near 10 percent surge after OPEC hammered out a last-minute deal to cut oil output for the first time in eight years.

Adding to the buying sentiment was a better-than expected reading on Chinese factory output that provided fresh hope the world's number two economy was stabilising after years of slowing growth.

The OPEC exporters' group, meeting in Vienna, said its 14 members had agreed on specific targets that will reduce production by 1.2 million barrels a day from next month, while key non-member Russia also committed to a reduction.

Both main contracts surged on the announcement, which ended weeks of uncertainty and volatility on crude markets as the key players bickered over who would shoulder the biggest burden of the cuts, leading to worries a deal would not be reached.

Brent and West Texas Intermediate both climbed more than one percent to sit above $50 in Asian trade, pushing regional investors back into energy firms on hopes the higher prices would boost revenues.

"The words 'OPEC' and 'exceed expectations' have rarely, if ever, been used in the same sentence. However yesterday’s production deal seems to have done just that," Jeffrey Halley, senior market analyst at OANDA, said in a note.

"Cuts have been shared across all members, including the recalcitrant Iran and Iraq."

- China factory boost -

Still, the deal lit a fire under energy firms. Tokyo-listed Inpex was the big gainer, piling on 10 percent, while Woodside Petroleum soared more than six percent. CNOOC ploughed 6.1 percent higher in Hong Kong and PetroChina almost five percent.

Among stock markets, Japan's Nikkei ended up 1.1 percent at its highest close this year, while Hong Kong added 0.4 percent and Shanghai closed up 0.7 percent.

Sydney gained 1.1 percent, Seoul was flat and Manila added 1.2 percent. There were also healthy advances in Singapore, Jakarta, Taipei and Wellington.

In early European trade, London was flat, while Frankfurt fell 0.4 percent and Paris shed 0.2 percent.

The removal of uncertainty provided fresh support to the dollar, which rallied towards 115 yen, its highest mark since February, before easing back slightly. And gold suffered a sell-off, sinking 1.7 percent to $1,167 as investors walked away from safe-haven assets that are popular in times of uncertainty.

In China, official figures showed a gauge of manufacturing activity had hit its highest level since mid-2014, although analysts pointed out the reading was a mixed blessing.

"Underlying data shows that this is pretty clearly heavy-industry driven, with help from credit and little contribution from consumption," Christopher Balding, an associate professor at the HSBC School of Business at Peking University in Shenzhen, told Bloomberg News.

"While this may prop up growth in the short term, it is clearly not rebalancing or deleveraging."

And Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group in Hong Kong, warned: "With this growth momentum, the (central bank) doesn’t need to ease."

Focus now turns to the release Friday of US jobs data. With dealers certain the Federal Reserve will hike interest rates this month, the figures could provide some insight into its plans for future increases over the next year.

- Key figures around 0800 GMT -

Tokyo - Nikkei 225: UP 1.1 percent at 18,513.12 (close)

Hong Kong - Hang Seng: UP 0.4 percent at 22,878.23 (close)

Shanghai - Composite: UP 0.7 percent at 3,274.07 (close)

London - FTSE 100: FLAT at 6,783.88

Euro/dollar: UP at $1.0622 from $1.0590 Wednesday

Dollar/yen: DOWN at 114.00 yen from 114.49 yen 

Pound/dollar: UP at $1.2532 from $1.2507

Oil - West Texas Intermediate: UP 66 cents at $50.10 per barrel

Oil - Brent (new contract for February): UP 72 cents at $52.56

New York - Dow: UP less than 0.1 percent at 19,123.58 (close)

Source: AFP