Reuters - Share indexes climbed Tuesday as market participants bet China's economic strength would help underpin growth in the region - even as pandemic lockdowns threatened to lengthen the road to recovery in the West.

Data out Monday confirmed the world's second-largest economy was one of the few to grow during 2020 and actually picked up speed as the year closed.

MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.98% to close to its high. Japan's Nikkei bounced 1.5%, recovering all the losses suffered Monday when caution had dominated markets.

Australia's index climbed 1.25% as market participants bet on news that Queensland state was set to lift virus-led restrictions and on prospects of better production numbers from local miners. It was also helped by improved industrial activity in top consumer China.

China blue chips remained flat while Hong Kong's Hang Seng advanced 1.8%.

U.S. stocks looked a little steadier as futures for the S&P 500 added 0.51% and Nasdaq futures 0.59%.

Analysts at JPMorgan felt the coming earnings season could brighten the mood given the consensus in Europe was for a fall of 25% year on year - setting a very low bar.

"The projected earnings-per-share growth in Europe now stands at the lows of the crisis which seems too conservative and could likely lead to positive surprises over the reporting season," they said.

The same could be true for the U.S. where results from Bank of America, Morgan Stanley, Goldman Sachs and Netflix are due this week.

For now, dealers were cautious ahead of U.S. President-elect Joe Biden's inauguration given the risk of more mob violence, along with doubts about how much of his fiscal stimulus package will pass Republican opposition in Congress.

Janet Yellen, Biden's nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday the government must "act big" with the coronavirus relief plan.

"Biden will not want the risk of a double-dip recession to escalate," analysts at ANZ said.

The full $1.9 trillion proposal combined with stimulus already agreed would amount to 10% of gross domestic product.

"That would be sufficient to close any output gap and underpin a gradual recovery in inflation as demand firms," they said. "But it will be a difficult winter, and market participants will need renewed confidence in the inflation trade before established earlier trends reassert themselves."

Wall Street is preparing for tougher regulations now that the Democrats control the Senate - with Biden set to nominate two consumer champions to top financial agencies.

In bond markets, 10-year Treasury yields were steady at 1.10% and off their recent 10-month high of 1.187% as market participants waited to see how much fiscal stimulus might actually get passed.

Currencies were quiet with the dollar index last at 90.684.

The euro was little changed at $1.2095 after touching a six-week low of $1.2052 overnight. The dollar was unmoved on the safe-haven yen at 103.89.

The Canada dollar eased to $1.2731 on reports Biden would cancel a permit for the Keystone XL pipeline as one of his first acts in office.

Gold steadied at $1,840 an ounce after briefly reaching a six-week low of $1,809.90 overnight.

World demand concerns kept oil prices in check. U.S. crude fell 0.1% to $52.29 a barrel while Brent crude futures rose 0.48% to $55.02 a barrel.