* MSCI Asia ex-Japan down 0.1 pct, Nikkei falls 0.4 pct
* HSBC Oct flash China manufacturing PMI signal recovery
* Higher Australian inflation data lifts Aussie
TOKYO, Oct 24 (Reuters) - Data suggesting a gathering economic recovery in China helped trim declines in Asian shares on Wednesday, though investors stayed risk averse due to weak corporate earnings results worldwide and enduring worries over economic slowdown.
The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a three-month high of 49.1 in October, also registering the most robust order books since April, signalling a strengthening recovery.
The MSCI index of Asia-Pacific shares outside Japan eased 0.1 percent, slightly trimming an earlier 0.3 percent drop. Hong Kong shares also narrowed losses to a 0.1 percent from a decline of 0.3 percent, while Shanghai shares steadied from a 0.2 percent fall.
Japan's Nikkei average were down 0.4 percent, recovering from an earlier drop of more than 1 percent.
``Recent data have suggested that Chinese growth may have bottomed out last month, helping to improve market sentiment as U.S. economic figures have also been hinting at a brightening recovery trend recently,'' said Kyoya Okazawa head of global equities at BNP Paribas in Tokyo.
But corporate earnings were a bigger focus for South Korean shares, which fell 0.7 percent, as lacklustre results in local and international markets weighed on investor sentiment.
SK Hynix Inc, the world's No.2 computer memory chipmaker, reported a third-quarter operating loss before the market opened, but its shares gained as the loss was smaller than expected.
Australian shares were down 0.6 percent at a one-week low as a stronger inflation data scaled back expectations for a further interest rate cut, countering the bullish impact from positive data from China, Australia's single largest export market.
The dollar was steady against the yen at 79.82 yen, having hit its highest since early July of 80.02 on Tuesday.
The Australian dollar rose to a high of $1.0317 after the Chinese data, having earlier risen from around $1.027 following data showing Australian consumer prices increased a surprisingly large 1.4 percent last quarter, lowering expectations for interest rate cuts.
The Aussie rose 0.5 percent against the yen to 82.33 yen , helping the euro to steady against the yen at 103.70 yen. The euro touched a 5/1-2 month high against the yen of 104.45 on Tuesday.
Markets may remain cautious, but their response ``is more geared towards consolidating risky assets near lower levels that justify bearing the risk, rather than the pre-announcing more difficulties to come'', Barclays Capital said in a research note.
On Tuesday, a leading European share index, te FTSEurofirst 300 index, slid to its lowest level in more than one-and-a-half months on Tuesday, while U.S. stocks fell, with the Dow industrials suffering the biggest drop since June 21 after DuPont and United Technologies showed profit growth slowing, adding to a string of disappointments from companies falling short of Wall Street's expectations.
U.S.-listed shares of foreign companies slid across the board on Tuesday, also on fresh worries over the euro zone's debt crisis as Spanish bond yields rose after Moody's Investors Service downgraded five of Spain's regions.
Spot gold recovered to rise 0.3 percent to $1,712.79 an ounce after falling 1.2 percent to a six-week low of $1,703.50 on Tuesday as other assets fell.
U.S. crude rose 0.6 percent to $87.18 after settling at a three-month low of $86.67 on Tuesday. Brent crude futures were up 0.5 percent at $108.83.
The euro steadied at $1.2988 from Tuesday's low of $1.2952, but well below last week's high of $1.3140. The euro's low this month was around $1.2804.
Investors continue to wait both for Spain to ask for aid to help manage its huge public debts with external funds, and for Greece to agree to conditions attached by its global lenders in exchange for a further bailout.
Germany's Sueddeutsche Zeitung paper reported in its Wednesday edition, without citing sources, that euro zone states will grant Greece an extra two years to bring its budget deficit to within agreed targets.
The euro could be pressured if initial readings of euro zone purchasing managers' index and a German Ifo business sentiment survey due later on Wednesday signal further deterioration.
U.S. Federal Reserve Chairman Ben Bernanke has told close friends he probably will not stand for a third term at the central bank even if President Barack Obama wins the Nov. 6 election, the New York Times reported.
Under Bernanke, the Fed has taken aggressive easing policies to help underpin the tepid U.S. recovery. The Fed is unlikely to take fresh steps when it ends a two-day meeting on Wednesday, opting to assess the impact of last month's aggressive quantitative easing measures.
Sober investor sentiment hit Asian credit markets, pushing the spread on the iTraxx Asia ex-Japan investment-grade index 4 basis points wider.