HONG KONG (Reuters) - Asian stocks edged up on Tuesday to a one-month high, but gains were kept in check as hopes for big government spending to revive growth were offset by investors shying away from risk in wrapping up a brutal 2008.
U.S. crude oil prices were little changed near $43.80 a barrel after rebounding from a four-year low last week, while safe-haven government bonds dipped slightly.
"Reports about additional government support and economic stimulus plans do help sentiment, but the economy is still in a deep slowdown, and we will probably see more grim economic data," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities in Seoul.
Global stocks bolted higher on Monday as U.S. authorities thrashed out a rescue plan for struggling automakers and U.S. President-elect Barack Obama said he would undertake the biggest infrastructure spending since the 1950s.
The White House reviewed a Democratic plan to bail out the automakers with $15 billion of loans.
Investors are still debating whether the sharp sell-off this year has run its course or there is worse to come as the global economy slides into a deep recession that has already claimed the three major regions: the United States, Japan and the euro zone.
Data on Tuesday showed Japan's economy contracted at an even faster pace than originally estimated during the third quarter, showing the recession deepening and raising worries the world's second largest economy faces its longest period of contraction ever.
Economists at Deutsche Bank forecast that global growth next year will be barely above zero.
The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 0.3 percent and touched its highest in about a month, a day after jumping 7 percent.
Hopes that Chinese economic leaders meeting this week in Beijing would unveil more measures to prop up growth helped fuel the rebound.
HUNT FOR CAPITAL
The financial crisis is still forcing banks to hunt for more capital, with banking shares in Australia taking a hit after Westpac Banking Corp (WBC.AX: Quote, Profile, Research, Stock Buzz) announced a $1.7 billion share sale.
"It's a reminder that there's still going to be an ongoing call for additional capital, maybe not this side of the new year, but possibly on the other side of the new year," said Jamie Spiteri, a dealer at Shaw Stockbroking.
Japan's Nikkei average .N225 rose 0.5 percent, lagging the 3.8 percent jump in the S&P 500 .SPX on Monday.
But the yen's gains showed that investors are still taking advantage of any rebound in higher-yielding currencies to sell, suggesting more market players are looking to close out positions and raise cash holdings before year-end. Continued...
