* China GDP data better than expected
* Asia shares on track for best monthly gains since 2012
* Dollar, euro steady ahead of ECB meeting
* Dollar holds gains on recent data
By Patrick Graham
LONDON, Oct 19 (Reuters) - 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 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.
Bank of America Merrill Lynch (N:BAC) flow data also indicated that
emerging market equity funds saw inflows from the first time in
three months, a good sign for Asia. ID:nL3N12I0RX
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.