European shares edge up as China data eases growth worries

European shares edged toward a one-month high and Asian stocks surged on Thursday, as a slew of Chinese data boosted optimism over the health of the world economy.

The gains were being held in check by concerns there could be disagreements at a two-day European leaders' meeting, which begins later, over plans for a banking union or measures to help struggling Spain and Greece.

No substantial decisions are expected to be taken at the summit and that could revive concerns about complacency in tackling the three-year-old debt crisis.

The FTSE Eurofirst 300 <.FTEU3> index of top European shares, which hit a three-week high on Wednesday, steadied at around 1119.15 points, a gain of just 0.045 percent.

London's FTSE 100 , Paris's CAC-40 and Frankfurt's DAX opened between unchanged and 0.1 percent higher. U.S. stock futures were slightly lower.

"We could edge higher if Spain asks for assistance from the European Central Bank, but any gains will likely be short-lived as investors focus on company earnings," said Heinz-Gerd Sonnenschein, equity markets strategist at Deutsche Postbank.

China's third-quarter gross domestic product grew 7.4 percent from a year earlier, the slowest pace since the first quarter of 2009 but in line with expectations, while other data such as a 9.2 percent rise in industrial output for September exceeded forecasts.

"The economy is showing signs of stabilising. That is good news," said Dong Tai, economist at Credit Suisse in Hong Kong.

The commodities-sensitive Australian dollar touched a two-week high of $1.0397 after the Chinese data, and last traded at $1.0376.

Even the dollar rose, touching a one-month high of 79.22 yen, after data on Wednesday showed the U.S. housing market improving sharply in September leaving the Japanese currency to take the brunt of investor selling.

(Reporting by Richard Hubbard; Editing by Will Waterman)