World stocks steadied on Tuesday after hitting a two-month high in the previous session, while European stocks rose as investors awaited the start of U.S. corporate earnings season.

An Australian interest rate cut and fresh steps by Japan to free up credit failed to prevent losses for Asian stocks, in turn pushing the MSCI world equity index <.MIWD00000PUS> down 0.1 percent as investors took a breather from a month-long rally.

In Europe, mining and resource shares outperformed with investors eyeing the quarterly earnings report from U.S. aluminum producer Alcoa due later.

Our confidence is growing that global equity markets are ending the bottoming process that started with the waterfall decline last October and that the lows from early March do represent the lows for this cycle, Bob Doll, global chief investment officer of equities at BlackRock, said in a note. The FTSEurofirst 300 index <.FTEU3> rose 0.6 percent. Emerging stocks <.MSCIEF> lost half a percent.

U.S. crude oil rose 1 percent to $51.60 a barrel.

The June bund futures was steady.

The yen rose 0.6 percent to 100.44 per dollar. The Japanese government is planning to unveil a new economic stimulus package worth more than 2 percent of GDP on Friday as the country grapples with its worst recession since World War Two.

The new package will add around $100 billion to spending already planned under previous measures.

The euro was 0.2 percent weaker at $1.3369.

The currency market has simply been reacting to recent stocks moves. It's too early to say optimism in the market will continue, said Satoshi Okagawa, head of FX forward trading group at Sumitomo Mitsui Banking in Tokyo.

We need to see upcoming earnings from financial corporations and the results of 'stress tests' among (U.S.) banks.

The dollar <.DXY> rose 0.1 percent against a basket of major currencies.

(Editing by Patrick Graham)

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