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HONG KONG - Asian shares were cautiously higher on Tuesday after a late revival on Wall street, though global growth fears stoked by China’s stringent COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.8%, helped by China’s blue chip index adding 0.33%, after its worst day in two years on Monday. Hong Kong’s benchmark Hang Seng Index also bounced 0.6%.

Yet sentiment remained fragile, after Twitter Inc shares rose on news that Elon Musk, the world's richest person, clinked a deal to pay $44 billion cash for the social media platform populated by millions of users and global leaders.

The nervousness about China's economic slowdown hit Australian shares in early trade, with the local benchmark down 1.78%, hurt particularly by declines in miners.

Japan's Nikkei stock index rose 0.57%. U.S. stock futures were little changed in Asia trade.

The stringent lockdown in China, and its proliferation as cases spread to other big cities like Beijing, is weighing on the economic growth outlook and investment sentiment, said Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas.

“If the lockdown situation persists for longer," it impact China's economy significantly and "also have an impact on the supply chains across the world,” he said.

On top of the China lockdown worries, markets have also been fretting that an aggressive pace of Fed tightening could derail the global economy, which has only just started to recover from the COVID-19 pandemic hit.

The Fed is expected to raise rates by a half a percentage point at each of its next two meetings. [FEDWATCH]

Lockdown in China’s financial hub Shanghai has dragged into a fourth week, as authorities stick to their “dynamic zero-Covid” policy to combat the latest outbreak of Omicron cases.

In currency markets, the dollar was in fine fettle on safe-haven demand. China's offshore yuan was steadier in early trading, at 6.5564 per dollar after the People's Bank of China said late on Monday it would cut the amount of foreign exchange banks must hold as reserves.

That helped it recover from a year-low of 6.609 per dollar on Monday, hurt by fears about China's economic growth.

The dollar was higher against most peers, with its index against a basket of rivals at 101.58, just off its overnight two year peak.

Benchmark US 10-year yields were steady at 2.8121% in morning deals. Treasury yields retreated on Monday from hawkish Fed-induced highs, as the China lockdown and growth fears sent investors to the safety of U.S. bonds.

The same worries jolted the oil market on Monday, slicing about 4% of its value to its lowest in two weeks. In early trade in Asia, U.S. crude steadied a bit, up 0.05% at $98.59 per barrel and Brent was at $102.42, up 0.1%.

Spot gold added 0.3% to $1,902.91 an ounce.

(Reporting by Xie Yu; Editing by Shri Navaratnam)