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London. Robust growth in China helped stock markets rally strongly on Tuesday as investor fears of an abrupt slowdown in the world’s second-largest economy were eased.

With Europe seemingly heading back into recession and the United States still to convince that its economy is improving, China is important to shore up the global economy as well as sentiment, especially at a time when many investors are openly fretting about a potentially devastating Greek debt default that could prompt further turmoil in financial markets.

Government figures showed that the slowdown in Chinese growth in the final quarter of 2011 was not as big as had been feared. Though the drop to 8.9 percent represented the lowest rate in two and a half years, the markets had been expecting a bigger decline to 8.7 percent.

“Equity markets are giving a positive reception to the latest set of Chinese economic data which shows that the economy is managing to avoid a hard landing despite background concerns of local government debt and banks’ loan exposure to a previously overheated real estate sector,” said Neil MacKinnon, global macro strategist at VTB Capital.

In China, the benchmark Shanghai Composite Index jumped 4.2 percent, the most in more than two years. The Shenzhen Composite Index of China’s second, smaller exchange, surged 5.1 percent.

Hong Kong’s Hang Seng soared 3.2 percent, while Japan’s Nikkei 225 Stock Average rose 1.1 percent. Markets in South Korea, Australia, Singapore and Taiwan also advanced.

Following Asia’s strong performance, Europe’s markets have traded strongly. Germany’s DAX was up 1.7 percent, while the CAC 40 in France rose 1.4 percent. The FTSE 100 index of leading British shares was 0.8 percent higher.

Wall Street was poised for a solid return from the Martin Luther King, Jr. day off on Monday — with futures on the Dow Jones industrial average and the broader Standard & Poor’s 500 higher.

The rebound in sentiment could also be seen in other markets as well, with the euro up 0.9 percent at $1.2790 and oil prices back above $100 a barrel. Both assets often get supported when investors have a predilection to take on riskier assets.

The euro has foundered in recent days and weeks on rising concerns of a recession in the 17-nation euro zone and renewed speculation that Greece will default on its debts.

Greece remains the epicenter of the European debt crisis and is struggling to agree a deal with its private creditors to get them to reduce the value of their holdings of Greek debt.

“It seems reasonable to start planning for the possibility of a Greek default in March and possible even an exit from the single currency,” said Simon Derrick, senior analyst at The Bank of New York Mellon.

Crude oil on the New York Mercantile Exchange was 1.9 percent higher at $100.57 a barrel. Gold was up 1.9 percent at $1661.90 an ounce.

Associated Press