Asian stocks off two-month lows as Wall Street extends rebound

By Shinichi Saoshiro

TOKYO (Reuters) - Asian stocks pulled further away from two-month lows on Tuesday, lifted by Wall Street's extended rebound from last week's steep fall.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent after sliding to its lowest level since Dec. 11 on Friday.

Australian stocks <.AXJO> rose 0.2 percent and South Korea's KOSPI climbed 0.9 percent. Japan's Nikkei <.N225> added 0.75 percent.

Wall Street's three major indexes rose for the second day on Monday as investors regained some confidence after U.S. equities had their biggest weekly drop in two years. [.N]

Still, caution lingered in the broader markets following the U.S.-led tumble in risk assets last week.

"It is hard at this stage to tell if the U.S. markets have bottomed out, considering that bets against the dollar still remain significant," said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.

"On the other hand, attempts by investors to pull money out of the emerging markets during last week's turmoil appeared to have been unexpectedly limited, so that is an encouraging sign."

The dollar index against a basket of six major currencies extended modest losses suffered overnight and dipped 0.1 percent to 90.093. The dollar index edged back from a two-week high of 90.567 scaled late last week, when it had benefited as a safe haven in the wake of the global market selloff.

The greenback was steady at 108.680 yen . The euro was flat at $1.2294 .

The Australian dollar slipped 0.15 percent to $0.7851 after rising about 0.6 percent overnight on the back of higher commodity prices.

Copper prices bounced back from two-month lows overnight as more stable global markets encouraged investors to return to commodities. [MET/L]

The dollar's pullback from two-week highs also helped commodities. A lower greenback favours non-U.S. buyers by reducing the price of dollar-denominated commodities.

U.S. crude futures were 0.2 percent higher at $59.42 per barrel.

Spot gold rose 0.5 percent to $1.322.46 an ounce.

(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)