Asian shares and the risk-sensitive Australian dollar edged higher in choppy trade on Thursday, with investors worrying about slow global growth and awaiting fresh U.S. economic data and a European Central Bank policy meeting later in the day.
U.S. stock futures rose 0.5 percent, as a CNN/ORC snap poll said 67 percent of registered voters surveyed thought Republican candidate Mitt Romney, seen as pro-business, won the first debate with President Barack Obama.
Financial spreadbetters expect London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX to open as much as 0.5 percent higher.
The rise in U.S. stock futures bolstered Japan's Nikkei average, which was up 1.2 percent, adding to earlier gains made on better-than-expected U.S. labour and service-sector data overnight and a weaker yen.
The MSCI index of Asia-Pacific shares outside Japan erased earlier losses to edge up 0.3 percent. Chinese markets are closed this week for public holidays.
Australian shares were up 0.3 percent, after a 14-month closing high on Wednesday boosted by an interest rate cut and a weaker local dollar. But South Korean shares were flat while the Hong Kong market edged up 0.2 percent.
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Phillipines shares were the region's best performer, with the benchmark index up 1.4 percent and hitting a fresh record, buoyed by consumer and retail sectors.
Stock price gains remained capped, however, as investors have switched back to worrying about grim economic prospects after global policy steps to support growth and calm market jitters last month inspired a broad market rally.
"While market sentiment remains supported by last month's policy steps, one can sense in the way the Australian dollar moves that investors are mindful of downside risks, namely the risk of Chinese growth slowdown," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank.
"Assistance for Spain is a near-term focus but markets are basically marking time until the issue of U.S. fiscal cliff is clarified. Since that won't happen any time soon, investors will continue weighing the effect of stimulus measures against growth concerns," she said.
The "fiscal cliff" refers to the combination of broad-based spending cuts and tax rises, both set to take effect on January 2, that could seriously dent U.S. growth.
The Australian dollar was up 0.2 percent to $1.023, rebounding from a one-month low of $1.0182 hit earlier after sluggish retail sales underscored restrained consumer spending and made the case for more rate cuts.
The Reserve Bank of Australia cut interest rates on Tuesday, aiming to underpin a domestic economy feeling increasing pain from the economic slowdown in China, Australia's largest export market. A drop in commodities due tweak Chinese demand has weighed on the resource-rich Australian economy.
"The unfortunate thing is that we haven't really seen the bottom yet as far as Chinese economic growth is concerned," said Raymond Chan, chief investment officer at Allianz Global Investors, Asia-Pacific.
US DATA
Later on Thursday, weekly jobless claims and U.S. factory orders for August will be released, as well as minutes from the U.S. Federal Reserve's September 12-13 meeting at which the central bank launched aggressive stimulus packages aimed at reducing high unemployment.
These reports precede Friday's monthly payroll data, the first such labour market update since the Fed's action.
"The FOMC minutes may shed some light on any possible dimensions surrounding the improvement in the labour market the committee is looking for and scale of purchases they are willing to undertake," ANZ Bank said in a research note.
After unveiling a programme last month for buying bonds of struggling euro zone states that seek assistance to ease their financing stress, the ECB is expected to keep interest rates at a record low of 0.75 percent.
The euro edged up 0.2 percent to $1.2930, stuck in the middle of a three-week low of $1.28035 touched on Monday and a 4-1/2 month high of $1.31729 seen in mid-September.
The dollar index, which is measured against a basket of six major currencies, was down 0.2 percent, but the greenback rose to a two-week high of 78.72 yen.
SPAIN BUYS TIME
Sentiment has been weighed down by a delay in a widely expected rescue for Spain, the latest symbol of the euro zone's debt crisis, as well as ongoing negotiations between Greece and its international lenders over the fiscal austerity details needed to be cleared in exchange for a crucial bailout.
Still, expectations that Spain will ask for aid and the ECB's bond plan have eased fears about the region's debt crisis.
Options investors sought the least protection against the euro's drop in more than two years, with three-month euro/dollar risk reversals trading as low as 0.90 percent, a level not seen since March 2010.
Spain faces a test of investor confidence when it sells up to 4 billion euros of debt later on Thursday.
Portugal on Wednesday returned to bond markets for the first time since its 78 billion euro bailout last year.
U.S. crude was up 0.2 percent to $88.33 a barrel, rebounding from a two-month low of $87.70 on Wednesday, while Brent rose 0.4 percent to $108.58 after falling to a two-week low of $107.67 on Wednesday.