Most Asian stock markets clawed back early losses on Wednesday and the euro stabilized as news of stronger-than-expected exports from China offset worries that Europe's debt problems will stifle demand for Asian goods.

The Chinese numbers also sparked what looked to be a tentative return of risk appetite in markets globally.

European stock futures extended initial gains to 1.2 percent after sources told Reuters that China's exports grew 50 percent in May from a year earlier, well above expectations for a 32 percent rise. The official data is scheduled to be reported on Thursday.

Europe's FTSEurofirst 300 <.FTEU3> opened 0.7 percent higher.

The MSCI ex-Japan share index <.MIAPJ0000PUS> reversed losses to rise 0.33 percent by mid-afternoon, with Shanghai stocks <.SSEC> jumping 3 percent and Hong Kong's Hang Seng index <.HSI> up 1.2 percent.

Japan's Nikkei <.N225> pulled off its lows but still ended down 1 percent at a six-month closing low as investors worried about whether Europe can resolve its deficit problems. <.T>

The Australian dollar rose to $0.8255 from about $0.8210, recouping its losses on the day.

The report also helped lift the euro against the dollar, taking it up to $1.1968 and erasing some of its losses. But it remained near four-year lows and analysts said the outlook for the single currency remains grim.

Asian markets fell in early trade on persistent concerns that Europe's debt problems could impede or even derail a global economic recovery, with weaker growth likely to cut into company earnings. Fitch Ratings said on Tuesday that the UK faced a formidable fiscal challenge and urged the government to cut its deficit.

Markets were also unsettled by conflicting signals from top U.S. Federal Reserve officials on Tuesday on the direction of interest rates, highlighting a split within the central bank as the U.S. economy shows signs of slowing.

Investors were also awaiting a European Central Bank meeting on Thursday to see if it will announce fresh steps to ease strains from the euro zone's debt crisis.

The ECB is also expected to publish a new set of economic forecasts for the region which are likely to signal somewhat stronger activity, despite worries that debt problems and government austerity measures will sharply brake growth.

There are some who believe that the ECB may go as far as to lower interest rates, although this view is not widely held, said a trader for a Japanese trust bank.

But if the ECB only offers to supply more funds and does not meet market expectations for bold steps to help the economy, the stock market may not react positively and that could hurt the euro, too, he said.

Risk-averse investors have streamed into gold, sending prices for the precious metal to a record dollar high, on persistent fears that the euro zone debt problems will spread.

Markets hate uncertainty and at the moment you've got a lot of it, said Peter Wright, a dealer at Burrell & Co in Australia.

U.S. stocks rose up to 1.3 percent in volatile trade overnight, but investors shied away from larger companies which have significant exposure to Europe. <.N>

U.S. crude oil futures prices rose 67 cents or 0.9 percent to $72.66 a barrel after industry data showed U.S. crude inventories fell more than expected last week.

(Editing by Kim Coghill)

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