European stocks climbed on Monday after Chinese economic growth data came in slightly better than expected, allaying months of concerns over the slowdown in the world’s second-largest economy.

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 per cent reading just beat a forecast for 6.8 per cent 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 has 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 per cent, while Germany's DAX gained almost 0.8 per cent.

Asian markets were mixed. Japan's Nikkei fell almost 1 per cent 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 was up 0.3 per cent 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 US 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.

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 index against a basket of currencies was up 0.1 per cent at 94.616, rebounding from a seven-week low of 93.806 hit on Thursday.

The euro was at $1.1364, 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, off its seven-week peak of 118.065.

Oil prices were down around 1 per cent extending a week of declines. Brent dipped back under $50 a barrel to $49.93.

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