Asia stocks rebound from slide

By Eric Burroughs

HONG KONG (Reuters) - Asian stocks bounced back on Friday from their worst drop in two months, with investors taking heart from the United States' return to economic growth, which gave reassurance on the recovery's staying power.

Traders said the slide in shares and higher-yielding currencies the previous day was caused in part by hedge funds pulling out funds from winning bets this year as many in the United States are closing their books for the year next month.

The MSCI index of Asia-Pacific shares outside Japan rose 2 percent after a tumble of 2.4 percent on Thursday, the biggest since August when plunging Chinese shares hit markets across Asia.

Commodities recovered along with stocks. Crude oil prices held near $80 a barrel and a one-year peak struck last week. But the Australian dollar, the major currency offering the highest yield, slipped as some market players booked profits on its 2 percent surge -- the biggest since June.

Analysts said the 3.5 percent annualised growth in the United States during the third quarter, pulling the economy out of its worst recession since the Great Depression, pointed to further growth ahead thanks to expected corporate inventory rebuilding and government spending.

"The GDP number was supportive of a better economic growth environment. The higher-risk stocks are finding more support," said RBS Australia head of distribution Leigh Gardner. "The growth trajectory in North America and in Australia is supportive of markets going higher."

HOPES FOR QUICK REVIVAL

The figures helped relieve some investor worries that the global recovery was losing momentum, which had prompted some to take profits on this year's equity market surge as heavy government stimulus and interventions helped revive growth more quickly than expected.