Tokyo - Asian shares rose on Tuesday but gains were moderated by concerns over global growth prospects, especially in the world's second-biggest economy China, and expected weak US corporate earnings.
The MSCI index of Asia-Pacific shares outside Japan added 0.5%, pulled higher by Hong Kong and China shares which rose 1.1% and 2%, respectively, on hopes of more steps to support the market from Beijing.
European shares are expected to gain as well, with a 0.2% rise in US stock futures suggesting a solid start on Wall Street.
Financial spreadbetters expected London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX to open as much as 0.5% higher.
"Asian equities markets are feeling the positive effects from the recent global easing, prompting investors to buy the region's stocks which have remained undervalued," said Hirokazu Yuihama, a senior strategist at Daiwa Securities.
"Weak third-quarter corporate earnings, as well as a slowdown in the Chinese growth rate to below or around 8 percent have already been noted in various reports - reasons why further monetary easing took place. But the outlook for sluggish fundamentals will likely limit the markets' upside."
Australian shares rose 0.6% to a fresh 14-month high, as a jump in iron ore prices lifted miners and helped offset concerns about global economic growth.
The International Monetary Fund cut its global growth forecast on Tuesday to a 3.3% expansion for 2012, down from its July estimate of 3.5%, making it the slowest year of growth since 2009. It warned US and European policymakers that failure to fix their economic ills would prolong the slump.
The IMF's World Economic Outlook preceded its twice-yearly meeting scheduled in Tokyo later this week, and followed a similarly grim report from the World Bank, which on Monday cut forecasts for the East Asia and Pacific region.
"A lot of investors are underweight China in their portfolios so any talk on QFII is likely to encourage them to start getting involved again," said Tom Kaan, a director at Louis Capital Markets in Hong Kong, referring to quotas for offshore investors to directly access China's domestic markets.
Tokyo's Nikkei stock average bucked the trend with a 0.9% slide on concerns about earnings. The Japanese corporate earnings season begins later in the month while the US third-quarter corporate earnings reporting season starts on Tuesday.
Oil prices jumped, with US crude oil futures rising $1 to $90.33 while Brent climbed towards $113.
"Right now the market is concerned about the continuing conflict between Syria and Turkey, and the worry is that if it escalates, it may disrupt Brent supplies," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
London copper rose 0.6% to $8 230 a tonne.
Euro, Aussie lifted
A recovery in equities pulled riskier currencies higher.
The euro inched up 0.1% to $1.2985 and the risk-sensitive and commodity-related Australian dollar gained 0.4% to $1.0224, off Monday's three-month low of $1.0149.
Uncertainty over whether Spain will request external aid to help streamline its huge public debt remained after eurozone finance ministers met on Monday to discuss issues related to the region's debt crisis, including what needs to be done to establish a single supervisory authority for eurozone banks.
The finance ministers launched their permanent €500bn bailout fund on Monday but said Spain, the country widely expected to be first to draw on it, was taking steps to overhaul its economy and did not need a bailout for now.
"Markets look as if they are tiring of the current stand off between Spain and Europe on the details of bailouts etc ... This may start to drag more on equity/commodity markets in the sessions ahead," Westpac Institutional Bank said in a research note. The European Central Bank's new programme to buy bonds of struggling eurozone states, aimed at reducing their borrowing costs, is conditional on the countries asking for help.
Greece, which was the focus of market jitters before Spain, said international lenders are considering giving the country two more years to reach its budget deficit reduction targets, and the extra time could be financed without more money from the eurozone.
Investors have preferred buying higher-yielding credit products with growth prospects than equities, and may eye the Philippines, Asia's largest issuer of sovereign debt in the global market, which is set to return this month with a $1bn global peso note offer.
Asian credit markets steadied, with the spread on the iTraxx Asia ex-Japan investment-grade index marginally wider by 1 basis point.
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