* Oct retail sales +14.5 pct y/y vs f'cast +14.0 pct
* Jan-Oct fixed asset investment +20.7 pct y/y vs f'cast +20.6 pct
* Oct CPI +1.7 pct y/y vs f'cast unchgd from Sept +1.9 pct
* PPI -2.8 pct vs f'cast -2.7 pct and -3.6 pct in Sept
By Nick Edwards and Kevin Yao
BEIJING, Nov 9 (Reuters) - China's annual industrial output growth quickened more than expected in October and fixed asset investment also ticked higher, cementing investors' expectations of a modest rebound in the final three months of 2012.
The data, key barometers of both domestic activity and output from China's export-oriented factory sector, offered further evidence that a cyclical recovery gained strength last month after the world's second largest economy suffered the slowest period of growth since early 2009 in the third quarter.
"October industrial output growth beat market expectations and confirmed a recovery trend," said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.
"But given the uncertainties in the outside world, we expect the recovery momentum to be limited and the full-year industrial output is likely to be around 10 percent for this year."
October saw a 9.6 percent year-on-year rise in industrial output, an improvement on the 9.2 percent growth achieved in September and ahead of the 9.4 percent consensus forecast from a Reuters poll.
Year-to-date fixed asset investment rose an annual 20.7 percent, a touch faster than the 20.5 percent reported for January-September and just ahead of the 20.6 percent forecast this time.
Retail sales also beat forecasts, rising 14.5 percent last month from a year ago, which compared to predictions of 14 percent and September's 14.2 percent reading.
The consensus view among economists is that a seven-quarter long cyclical downturn in China's growth ended in Q3, when it dipped to 7.4 percent year-on-year.
A tepid rebound to 7.7 percent is anticipated in Q4, with its mild nature restraining many investors from making aggressive turnaround bets, as evidenced by 10 of the 27 analysts polled by Reuters having forecasts below the median.
Data released earlier in Friday showed consumer inflation eased to its slowest pace in nearly three years in October, giving policymakers scope to further loosen monetary policy if needed to support growth in the world's second-biggest economy.
The consumer price index (CPI) rose 1.7 percent from a year ago, slower than the 1.9 percent posted in September. Economists polled by Reuters had expected inflation to hold steady.
Factory-gate prices in October fell 2.8 percent from a year earlier, a touch faster than the forecast fall of 2.7 percent but easing from September's 3.6 percent annual drop, which bodes well for a corporate sector struggling to cope with falling profits due to producer price deflation.
The headline consumer price index reading was the lowest since January 2010.
"I don't expect any easing in monetary policy until the end of this year because it would be unnecessary as the economy is recovering," Yao Wei, China economist at Societe Generale in Hong Kong, told Reuters.
Beijing has been fine-tuning economic policy for a year to support growth, and analysts expect that programme to broadly remain in place after a new leadership of the ruling Communist Party is unveiled at a congress that began on Thursday.
Outgoing party chief, President Hu Jintao - almost certain to be succeeded by Vice President Xi Jinping - said in a speech to the congress that China would stick to policies fostering sustainable, long-term economic development with the aim of doubling GDP over the 10 years to 2020.
China has cut benchmark interest rates twice this year, lowered bank reserve ratios three times since late 2011 and made repeated, large-scale liquidity injections into the financial system to underpin slowing growth in the short-term.