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 Fears that China is heading for an economic "hard landing" that
could halt a recovery in Europe and drive the developed world back
into recession next year have dominated markets since August.
But while monthly industrial output numbers were poor and the
quarterly growth figure was the weakest since the 2008 financial
crisis, the 6.9 percent reading just beat a forecast for 6.8 percent
and suggested official efforts to stimulate the economy were
working.
"The market has been beset with worries and actually things are not
so bad," said Andy Sullivan, a portfolio manager with Swiss
investment firm GL Financial Group.
"Although the start of the Q3 results have been messy, there are
enough positive signs on earnings growth to keep markets positive.
The world is not ending, things are more or less on track."
The FTSE Eurofirst index of leading European shares rose 0.4 percent
<.FTEU3>, while Germany's DAX gained almost 0.8 percent. <.GDAXI>
Asian markets were mixed. Japan's Nikkei <.N225> fell almost 1
percent and Shanghai was marginally in the red at closing.
But the global tremors of August's yuan devaluation and a market
slide in China appear to have largely settled: MSCI's broadest index
of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.3
percent at close to two-month highs, and this month is its best in
more than three years.
Adding to optimism are growing bets that the U.S. Federal Reserve
will delay its first rate hike since 2006 until next year,
encouraging investors to hunt for bargains in beaten-down Asian
equities.
"The market is turning optimistic, against a backdrop of ample
liquidity," said Yang Hai, strategist at Kaiyuan Securities.
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Bank of America Merrill Lynch flow data also indicated that emerging
market equity funds saw inflows from the first time in three months,
a good sign for Asia.
On currency markets, the dollar held firm against a basket of six
other major currencies, with all eyes on a European Central Bank
meeting later this week, expected to offer some hint of more
stimulus for the economy that may weaken the euro.
Early in European trade, the dollar's index against a basket of
currencies was up 0.1 percent at 94.616 <.DXY>, rebounding from a
seven-week low of 93.806 hit on Thursday.
The euro was at $1.1364 <EUR=>, up less than 0.2 percent on the day
but well off Thursday's high of $1.1495.
The yen traded steady at 119.38 yen to the dollar <JPY=>, off its
seven-week peak of 118.065.
Oil prices were down around 1 percent extending a week of declines.
Brent <LCOc1> dipped back under $50 a barrel to $49.93.
(Additional reporting by Saikat Chatterjee; Editing by Hugh Lawson)
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