Global stocks rally on China economic growth report

TOKYO - European and Asian stocks rallied Tuesday after China's quarterly economic growth met expectations, calming intense jitters about the global outlook that have battered markets since the beginning of the year.

France's CAC 40 rose 2.5 percent to 4,291.79 and Germany's DAX added 2.1 percent to 9,720.76. Britain's FTSE 100 gained 2.1 percent to 5,901.67.

U.S. shares were set for a sharp rise: Dow and S&P 500 futures jumped 1.5 percent. U.S. markets were closed for a public holiday Monday.

China's economic growth edged down to 6.8 percent in the final quarter of 2015 as trade and consumer spending weakened. The quarterly growth figure was the weakest in six years and 6.9 percent growth for the full year was the lowest in 25 years. But that was in line with the government's target and close to the median of private forecasts. Some analysts had forecast a much sharper slowdown. Chinese leaders are trying to reduce reliance on trade and investment by nurturing slower, more self-sustaining growth based on domestic consumption and services.

China's "official data do not point to a hard landing in the fourth quarter of 2015, but they provide little reason to stop worrying about China's drag on the global economy, either," said Bill Adams, senior international economist at PNC Financial Services Group. "Chinese domestic demand remains weak, held back by three persistent headwinds."

Fourth quarter earnings were mostly upbeat in the U.S. Bank Morgan Stanley swung back to a profit in the fourth quarter, helped by lower legal costs. Bank of America reported a 10 percent increase in net profit, better than market analysts had expected.

China's Shanghai Composite surged 3.2 percent to 3,007.74 and Hong Kong's Hang Seng gained 2.1 percent to 19,635.81. Australia's S&P/ASX 200 added 0.9 percent to 4,903.10. Japan's Nikkei 225 inched up 0.6 percent to 17,048.37. South Korea's Kospi added 0.6 percent to 1,889.64. Other regional markets also finished higher, gaining in Taiwan, Southeast Asia, India and New Zealand.

Benchmark U.S. crude was up 2 percent to $30.00 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, rose 5 percent to $30.00 per barrel.

The U.S. dollar edged up to 118.00 yen from 117.50 yen on Monday. The euro fell to $1.0871 from $1.0885.