By Nigel Stephenson
LONDON (Reuters) - Shares in Europe and Asia rose on Tuesday and the dollar gained after data showing China's economy grew last year at its slowest pace in a quarter of a century led investors to anticipate more efforts by Beijing to spur growth.
Wall Street, closed on Monday for the Martin Luther King Day holiday, looked set to open higher, with index futures up 1.6 percent.
Oil prices rose after strong Chinese fuel demand halted a slide to 2003 lows triggered by the lifting at the weekend of sanctions on Iran, while metals prices also gained.
Concerns about Chinese authorities' ability to rebalance the slowing economy have rattled investors this year, after a plunge in stock markets and the yuan currency raised concerns growth may be slowing more rapidly than previously thought.
China's economy grew 6.9 percent last year, and 6.8 percent year-on-year in the fourth quarter, data showed, down from 6.9 percent in the third and the weakest pace since the first quarter of 2009.
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In a harbinger of slower growth to come, December retail sales, industrial output and fixed-asset investment all came in below the expectations of analysts polled by Reuters.
As metals prices rose following the Chinese data, mining company shares led European stocks higher, with the pan-European FTSEurofirst 300 index up 2.3 percent, rebounding from a 13-month low hit on Monday.
The STOXX Europe 600 Basic Resources index, which includes miners, added 5.9 percent and Britain's miner-heavy FTSE 100 index rose 2.1 percent, with Anglo American up 11.5 percent and Glencore 12.8 percent.
"As figures weaken in absolute terms, we can potentially see additional stimulus measures. That is helping investors' appetite for risk," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.7 percent, bouncing off a four-year low.
Chinese shares rose on strengthened expectations of more stimulus. The CSI 300 index of the largest listed companies in Shanghai and Shenzhen closed up 3.0 percent while the Shanghai Composite gained 3.2 percent, after hitting a 13-month low on Monday.
Tommy Xie, economist at OCBC Bank in Singapore, said he expected more stimulus from the Chinese central bank, but that the stability of the yuan, also known as the renminbi, was critical to maintaining growth.
"If the renminbi continues to weaken, the volatility and capital outflows get worse, then that is likely to pose a challenge to growth."
The yuan traded at 6.5769 to the dollar in onshore markets, little changed from the previous close.
Earlier on Tuesday, the International Monetary Fund cut its global growth forecast for the third time in less than a year, to 3.4 percent in 2016 from 3.6 percent previously, citing a sharp slowdown in Chinese trade and weak commodity prices.
In London, Bank of England Governor Mark Carney said adjustment in China was not over and would subdue global growth and inflation for some time.
Expectations that Beijing will take further action, possibly as soon as next month, helped the dollar gain against the safe-haven Japanese yen, up 0.6 percent to 117.90 yen.
The euro fell 0.1 percent to $1.0879. The Australian dollar, whose fortunes are closely linked to China, a major market for Australia, rose 1.1 percent to $0.6935.
Sterling hit a seven-year low of $1.4207 after the comments from Carney, who earlier said he had no set timetable for when the BoE would raise interest rates and that inflation, which was flat for 2015, would need to move "notably" towards the bank's 2 percent target.
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The rise in stock markets nudged yields on low-risk German government bonds higher. Ten-year yields rose 3.2 basis points to 0.50 percent.
Oil prices took heart from data showing Chinese fuel demand last year rose compared with 2014, up 2.5 percent to 10.32 million barrels a day.
Brent crude, the global benchmark, rose $1.08 a barrel to $29.64. It hit lows not seen since 2003 on Monday on the prospect of Iranian output swelling a global glut.
Copper, of which China is the major consumer, rose 1.4 percent to $4,439 a tonne, having earlier hit a one-week high at $4,476 a tonne. Nickel prices also rose.
Gold dipped as risky assets advanced. It last traded at $1,084.70 an ounce.
(Additional reporting by Shinichi Saoshiro in Tokyo and Atul Prakash in London; Editing by Catherine Evans)