RPT-GLOBAL MARKETS-Asian stocks, oil rebound, but caution prevai

                                
 * Asian stocks gain 1.3 pct; recover from prior day slump
                                
 * Oil prices gain nearly $1 a barrel in rebound
                                
 * U.S. Treasuries, yen retain safe-haven lustre
                                
 * Central banks expected to cut rates aggressively
(Repeating to more subscribers)
                                
 By Rafael Nam
                                
 HONG KONG, Dec 3 (Reuters) - Asian stocks and oil recovered
on Wednesday following recent sell-offs, but low-risk assets
such as U.S. Treasuries also retained their lustre,
highlighting investor caution about the weakening global
economy.
                                
 The euro and the sterling fell ahead of meetings on
Thursday by the European Central Bank and the Bank of England,
which are expected to result in hefty interest rate cuts as
policymakers try to avoid off a deep and prolonged recession.
                                
 Governments and central banks worldwide are passing more
measures to stabilise financial markets, including potential
help being discussed for struggling U.S. auto makers, but it
will take some time to restore battered consumer and investor
confidence.
                                
 "It is difficult to see the rally in equities being
sustained and it will not take much in the way of more bad
economic news to bring a dose of reality back," Calyon analysts
said in a note to clients on Wednesday.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.3 percent as of 0255 GMT, rebounding
from a 4.1 percent slump in the prior session.
                                
 The gains tracked a rally in Wall Street on Tuesday that
came following a pledge by global industrial bellwhether
General Electric <GE.N> to leave its dividend intact despite
the worsening economy. [ID:nN01506020]
                                
 Still, the outlook for the global economy continues to
weaken, with Australia saying on Wednesday that growth in the
last quarter was at its slowest pace in eight years.
[ID:nSYD128083]
                                
 Corporate profits worldwide are also under threat as
consumers cut back spending. U.S. auto makers on Tuesday posted
a nearly 37 percent plunge in monthly sales that brought levels
to their lowest in since 1982, reinforcing their plea for a
bailout from the U.S. government. [ID:nN021255]
                                
 Asian markets gained, nonethless, led by shares seen as
oversold, though that was balanced by weakness in some auto
makers such as Honda Motor <7267.T> and technology exporters
such as Samsung Electronics <005930.KS> whose profits are set
to suffer.
                                
 Tokyo's Nikkei average <.N225> advanced 1 percent, clawing
back some ground after a drop of more than 6 percent on
Tuesday.
                                
 Shares in Hong Kong <.HSI>, Shanghai <.SSEC>, Singapore
<.FTSTI>, and Australia <.AXJO> gained more than 1 percent
each, but markets in South Korea <.KS11> and Taiwan <.TWII>
posted modest losses.
                                
 Among the advancers in the region, shares in Australia's
Qantas Airways <QAN.AX> rose 6.2 percent after saying it was in
talks with British Airways <BAY.L> to form a dual-listed
airline that could be worth almost $6 billion at current market
prices. [ID:nSYD7071]
                                
 EYE ON CENTRAL BANKS
                                
 Oil prices <CLc1> gained 78 cents to $47.74 a barrel after
steep drops in prior sessions that had left it at
three-and-a-half year lows. However, the outlook remains weak
ahead of data later in the day expected to show a third
consecutive week of rises in U.S. crude inventories as economic
growth and fuel demand slow. [ID:nN02466519]
                                
 Crude prices may find it hard to rally much farther in the
short-term given that only two-thirds of members of the
Organization of the Petroleum Exporting Countries (OPEC) are
meeting their pledge to lower output in November, according to
a Reuters survey. [ID:nL2183579]
                                
 The European Central Bank meets on Thursday, and most
economist still expect an interest rate cut of only 50 basis
points, despite a stream of poor economic data and a sharp drop
in inflation that had raised hopes for a larger easing.
[ID:nL2334202]
                                
 On the other hand, the Bank of England is expected to cut
rates by an aggressive 100 basis points, while financial
markets have priced in a 150 bps cut from New Zealand's central
bank, both scheduled for Thursday. [ID:nL2359014] and
[ID:nWEL359326]
                                
 Ahead of the decisions, the euro fell 0.4 percent to 118.05
yen <EURJPY=R> and eased 0.1 percent to $1.2695 <EUR=> against
the dollar. The sterling slid 0.5 percent to 138.32 yen
<GBPJPY=R>, crawling towards 13-year lows hit just above 137
yen the previous day.
                                
  The dollar slipped 0.2 percent from late U.S. trading on
Tuesday to 92.97 yen <JPY=>, hovering near a five-week low of
92.63 yen hit on trading platform EBS the previous day.
                                
 U.S. Treasuries were range-bound after gaining on Tuesday
amid safe-haven bids, anticipation of more rate cuts and the
possibility that the Federal Reserve could buy long-dated U.S.
government bonds.
                                
 Yields on benchmark 10-year Treasury notes <US10YT=RR> were
range-bound at 2.71 percent, while those for the 2-year note
<US2YT=RR> gained by about 4 basis points to 0.94, still below
the Fed's 1.00 percent target rate for overnight lending
between banks.
                                
 (For more news ont he global financial crisis, click on
[nCRISIS])
                                
 (Editing by Kim Coghill)