BANGKOK: World stock markets rose Monday on optimism that China's economic recovery is firmly taking root.    

Many analysts expect China's fourth quarter and 2012 growth figures due Friday to show the world's No. 2 economy continuing to bounce back from its worst slump since the 2008 financial crisis.

Sentiment improved last week after Japan announced a $224 billion stimulus package to boost its recession- and deflation-mired economy. A strong economic recovery has eluded Japan for more than 20 years since the bursting of its financial bubble in the early 1990s.

Britain's FTSE 100 rose marginally to 6,123.87. Germany's DAX gained 0.2 per cent to 7,727.68. France's CAC-40 added 0.2 per cent to 3,713.79.

Wall Street was set for slight gains, with Dow Jones industrial futures rising slightly to 13,437 while S&P 500 futures gained 0.1 per cent to 1,468.20.

Stock markets in Asia posted gains as investors grew more confident about China's economic recovery. China reported improving exports and imports last week, a sign of higher demand both inside and outside the country.

More signs of improvement are expected when China releases a slew of data on Friday, including factory output, investment and retail sales.

Hong Kong's Hang Seng rose 0.6 per cent to 23,413.26. South Korea's Kospi added 0.3 per cent to 2,002.77 and Australia's S&P/ASX 200 advanced 0.2 per cent to 4,719.70.

Japan's financial markets were closed for a public holiday.

Mainland Chinese stock markets were boosted when Guo Shuqing, chairman of the China's securities regulator, said at a conference in Hong Kong that there was room to raise by “at least” tenfold the quota of foreign institutions allowed to invest in China's domestic stock markets, which are largely off-limits to outsiders because of capital controls.

Mainland China's Shanghai Composite Index soared 3.1 per cent to 2,311.74 while the Shenzhen Composite Index for China's second, smaller stock market jumped 3.6 per cent to 918.23.

Dariusz Kowalczyk of Credit Agricole CIB in Hong Kong said China's growth likely picked up in the fourth quarter of 2012 to 7.9 per cent from 7.4 per cent in the three months ended in September. He expects first quarter growth in 2013 to hit 8.5 per cent.

He said such figures should put to rest worries that China's economy might be in for a hard landing.

“Risks have diminished both externally and domestically, and if they rebound, China has sufficient resources to manage them, so we are upbeat that a relapse will not occur,” he said in an email.

Still, a bobble in trade could cause a reversal, while inflation pressure is rising because of poor winter harvests, which would make it harder for Beijing to embark on new stimulus measures without pushing prices up more.

Analysts at Societe Generale have not ruled out a hard landing, which they define as real GDP growth falling below six per cent, partly because of China's vulnerability to trade shocks.

Among individual stocks, South Korea's SK Telecom advanced 4.2 per cent while Hyundai Heavy Industries fell 1.1 per cent. In Shanghai, gold retailer Lao Feng Xiang Co. Ltd. jumped seven per cent. China AVIC Avionics Equipment soared 10 per cent.

Benchmark oil for February delivery was up 49 cents to $94.05 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 26 cents to finish at $93.56 a barrel in New York on Friday.

In currencies, the euro rose to $1.3354 from $1.3338 late Friday in New York. The dollar rose to 89.37 yen from 89.20 yen.