RPT-GLOBAL MARKETS-Asia stocks climb on oil drop, US auto rescue

                                
 * Stocks gain on oil drop, US automaker rescue takes shape
                                
 * Some players hopeful worst over in 2008 sell-off
                                
 * Investors pick up Asia ex Japan shares for 3rd week-EPFR
                                
 * Dollar dips, but afe-haven bonds climb
 (Repeats to additional subscribers with no change to text)
                                
 By Eric Burroughs
                                
 HONG KONG, Dec 8 (Reuters) - Asia stock markets rose on
Monday, with investors taking heart from a rescue plan for U.S.
automakers and hopes that the sharp drop in oil prices will
ease some of the pain for households facing mounting layoffs.
                                
 Oil prices <CLc1> rose more than a dollar, but the plunge
to a four-year low near $40 a barrel is providing some relief
to the bleak landscape of tightening credit and job losses that
are hitting consumers around world. Shares of oil producers
fell, with Nippon Oil <5001.T> losing 5 percent.
                                
 The dollar slipped as stocks posted gains despite Friday's
dismal U.S. jobs report showing 533,000 jobs were lost in
November, the most in 34 years and one of the biggest drops
ever in the government data. [ID:nN05431090]
                                
 But a late rally on Wall Street on Friday, led by retail
shares, suggested some investors believe the worst may be over
after the plunge in stocks this year and a rush to safe-have
bonds that has driven benchmark U.S. Treasury yields to
half-century lows.
                                
 "The U.S. closed up...in spite of the fact they got a very
weak unemployment number. We've taken some solace in that and
the fact that the market did not sell off, and we are finding a
bit of fresh buying this morning," said Justin Gallagher, head
of Sydney sales trading at ABN AMRO in Sydney.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 4.3 percent but remains down 57 percent as
2008 comes to a close, what would be by far the biggest yearly
slide in its 20-year history.
                                
 But in a sign that investors are regaining some resolve to
put money to work, data from EPFR Global showed Asia ex-Japan
funds recording a third straight week of inflows in the week
through last Wednesday.
                                
 Japan's Nikkei average <.N225> climbed 2.6 percent on gains
in domestic shares after the U.S. S&P 500 <.SPX> rose 3.7
percent on Friday. For the year, the Nikkei has tumbled 48
percent and the S&P 40 percent.
                                
 MORE RESCUE PACKAGES
                                
 Around the world, policymakers kept up their efforts to try
and revive their economies.
                                
 U.S. President-elect Barack Obama said over the weekend
that he plans the biggest increase in infrastructure investment
since the 1950s with the goal of creating at least 2.5 million
jobs. [ID:nN05458678]
                                
 India launched $4 billion of extra spending to support the
economy, while Xinhua news agency reported that Chinese
economic leaders were meeting this week on measures to keep
growth above 8 percent.
                                
 Also over the weekend, the White House and congressional
negotiators sought to resolve the remaining difficulties over
an emergency rescue for the struggling U.S. auto industry.
[ID:nN07462460]
                                
 Many assets have shuffled sideways in the past several
weeks despite the relentless array of bleak news, giving some
analysts reasons to think the worst may be over after central
banks slashed interest rates and authorities put together
spending packages to revive growth.
                                
 "Perhaps the bad news is close to being fully priced in,"
said Societe Generale's FX sales desk in a note to clients.
                                
 VOLATILITY EASES
                                
 That stability has also brought down gauges of historical
volatility after what has been one of the most tumultuous years
on record in financial markets.
                                
 Analysts say that declining volatility typically signals
that markets are trying to form a bottom.
                                
 As stock markets have steadied, the dollar and yen have
slipped as investors tip-toe back into the euro and
higher-yielding currencies that have been battered throughout
the crisis on expectations for aggressive rate cuts.
                                
 The dollar was steady against the yen at 92.77 yen <JPY=>,
holding not far from the 13-year low struck in October, while
the euro edged up 0.2 percent to 118.30 yen <EURJPY=R>.
                                
 The dollar index, a gauge of its performance against six
major currencies, dipped 0.2 percent 86.701 <.DXY> and has
struggled below a 2-1/2-year high of 88.463 reached last month.
                                
 Safe-haven bonds were up despite the rise in stocks, partly
as caution prevailed on the economic outlook.
                                
 Japanese government bond futures jumping as market players
shifted positions into the March contract as the December
contract is set to expire this week.
                                
 December JGB futures <2JGBv1> were up 0.68 pint at 139.81.
The gains in futures dragged the benchmark 10-year yield
<JP10YTN=JBTC> down a basis point to 1.355 percent, near an
eight-month low struck last week.
 (Additional reporting by Mette Fraende in SYDNEY; Editing by
Lincoln Feast)