GLOBAL MARKETS-Asian shares rise, growth worries cap

* MSCI Asia ex-Japan rises 0.6 pct, Nikkei eases 0.3 pct

* Euro, Aussie steady off lows

* IMF cuts global growth forecast, warns U.S., Europe policymakers

By Chikako Mogi

TOKYO, Oct 9 (Reuters) - Asian shares rose on Tuesday but were capped by concerns over global growth prospects, especially in the world's second-biggest economy China, and expected weak U.S. corporate earnings.

The International Monetary Fund cut its global growth forecast on Tuesday to a 3.3 percent expansion for 2012, down from its July estimate of 3.5 percent, making it the slowest year of growth since 2009. It warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump.

The IMF also said on Tuesday that China's economic growth is expected to weaken to 7.8 percent this year, warning of risks to emerging Asia if the euro zone crisis worsens and the United States does not avoid its "fiscal cliff".

The IMF's World Economic Outlook preceded its twice-yearly meeting scheduled in Tokyo later this week, and followed a similarly grim report from the World Bank, which on Monday cut forecasts for the East Asia and Pacific region. It said the slowdown in China could worsen and last longer than expected.

The MSCI index of Asia-Pacific shares outside Japan

added 0.6 percent. Australian shares

rose 0.5 percent, climbing to a fresh 14-month high, as a 6 percent jump in iron ore prices

lifted miners and helped offset concerns about global economic growth.

However, Tokyo's Nikkei stock average

resumed

trading after a holiday on Monday with a 0.3 percent drop. Japanese corporate earnings season begins later in the month.

"Asian equities markets are feeling the positive effects from the recent global easing, prompting investors to buy the region's stocks which have remained undervalued," said Hirokazu Yuihama, a senior strategist at Daiwa Securities.

"Weak third-quarter corporate earnings, as well as a slowdown in Chinese growth rate to below or around 8 percent have already been noted in various reports. But the outlook for sluggish fundamentals will likely limit the markets' upside."

U.S. equities fell on Monday ahead of corporate earnings reporting season which starts Tuesday, as analysts forecast third-quarter earnings to fall for the first time in three years.

Oil prices recovered, with U.S. crude oil futures

rising 1.1 percent to $90.28 a barrel and Brent

climbing 0.8 percent to $112.73. London copper

rose 0.7 percent to $8,238 a tonne.

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Chinese vs U.S. equities:

HIGHLIGHTS from Eurogroup meeting:

IMF forecasts:

HIGHLIGHTS from IMF economic outlook:

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EURO, AUSSIE LIFTED

A recovery in equities pulled riskier currencies higher.

The euro

inched up 0.1 percent to $1.2977, off its two-week peak of $1.3072 reached on Friday. The risk-sensitive and commodity-related Australian dollar

gained 0.5 percent to $1.0229, after hitting a three-month low of $1.0149 on Monday.

Uncertainty over whether Spain will request external aid to help streamline its huge public debt remained after euro zone finance ministers met on Monday to discuss issues related to the region's debt crisis, including what needs to be done to establish a single supervisory authority for euro zone banks.

The Eurogroup finance ministers launched their permanent 500 billion euro bailout fund on Monday but said Spain, the country widely expected to be first to draw on it, was taking steps to overhaul its economy and did not need a bailout for now.

"Markets look as if they are tiring of the current stand off between Spain and Europe on the details of bailouts etc ... This may start to drag more on equity/commodity markets in the sessions ahead," Westpac Institutional Bank said in a research note. The European Central Bank's new programme to buy bonds of struggling euro zone states, aimed at reducing their borrowing costs, is conditional on the countries asking for help.

Greece, which was the focus of market jitters before Spain, said international lenders are considering giving the country two more years to reach its budget deficit reduction targets, and the extra time could be financed without more money from the euro zone.

Investors, who have remained largely cautious about putting money into riskier assets, have instead been buying higher-yielding credit products with growth prospects.

The Philippines, despite its junk bond rating, was likely to draw foreign investors when Asia's largest issuer of sovereign debt in the global market is set to return this month with a $1 billion global peso note offer.

Asian credit markets were softer early on Tuesday, with the spread on the iTraxx Asia ex-Japan investment-grade index

wider by 2 basis points. (Editing by Michael Perry)

((chikako.mogi@thomsonreuters.com)(+813 6441 1871 Reuters Messaging: chikako.mogi.thomsonreuters.com@reuters.net))

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