(Adds European index futures, updates prices)
* Euro STOXX 50, DAX, CAC-40 index futures up 0.7-0.9 pct
* MSCI Asia ex-Japan index rise over 3 pct, Nikkei up 1.7 pct
* Euro steadies above 9-mth low, eyes ECB decision at 1145 GMT
* Improving risk sentiment boosts oil
* Asia credit market tightens sharply
By Chikako Mogi
TOKYO, Oct 6 (Reuters) - European stock index futures rose on Thursday, after short-covering and value-hunting lifted Asian shares on optimism that euro zone leaders are acting to aid the bloc's financial sector and U.S. data suggesting the economy could avoid recession.
An easing of risk aversion, after an intensive sell-off earlier this week on fears that Europe's debt problems could trigger a new global financial crisis, helped boost commodities and saw Asian credit markets tighten sharply.
"The U.S. data supported a view that despite the recent deterioration in sentiment, the financial turmoil so far has not had a serious material damage to the economy, at least in the United States," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities.
"Shares are being bought back as the recent sell-off had brought the market to levels reflecting a recession, and a sharp loss in corporate profits, which is now seen as overdone."
MSCI's broadest index of Asia Pacific shares outside Japan rose 3.3 percent, recouping more than half the steep losses made this week and moving away from a two-year low hit on Tuesday.
The Nikkei share average rose 1.7 percent, snapping a four-day losing streak in a short-covering rally -- when investors realise gains by buying back borrowed stock they had previously sold in a bet on falling prices -- with commodity- and tech-sector shares in demand.
Hong Kong shares also rose from oversold conditions as investors covered short positions, propelling strong gains in several China-related names that have been among the most heavily shorted in the last few sessions. The Hang Seng Index jumped 4.7 percent.
But a disappointing start for China's largest listed brokerage Citic Securities, which fell as much as 10 percent on its Hong Kong debut, highlighted that investor confidence has not fully recovered.
"Investors want to look for stocks now with a track record with very low valuations. They don't have the appetite for new stocks," said Patrick Yiu, a director at CASH Asset Management.
Overall market volatility as measured by the VIX index , Wall Street's so-called "fear gauge", fell 7 percent to 37.81 on Wednesday, down sharply from this week's peak of 46.88, lending support to investors cautiously putting some risk back on in the near-term.
The VIX has traded in a 30-48 range after breaking higher in August, and failures to test the highs this week may raise the prospect of a swing lower in the near-term. A clear break in either direction would indicate the next major move.
Futures for the Euro STOXX 50
MARKETS EYE ECB DECISION
Asian credit markets reflected easing strains, with the iTraxx Asia ex-Japan investment grade index narrowing by about 10 points after a sharp widening at the start of this week.
Investors were likely to remain cautious about whether the market relief would be sustained, ahead of key events including the European Central Bank's policy meeting later on Thursday, the last meeting to be held under the presidency of Jean-Claude Trichet, and Friday's U.S. non-farm payrolls.
The ECB was expected to hold rates at 1.5 percent and restore long-term lending to banks, preparing the ground for a rate cut before the year-end. The rate decision was due at 1145 GMT, with Trichet's news conference at 1230 GMT.
The euro was steady around $1.3350 ahead of the ECB meeting, well off a nine-month trough of $1.3144 struck this week.
In a Reuters survey taken last week, 56 out of 75 economists said they expected the ECB to hold rates this time around, though 13 saw a 25 basis points cut and 7 predicted a 50 bp cut. A rate cut could reignite market jitters about the euro zone's sovereign debt woes hurting the economy, and resume selling pressures.
German Chancellor Angela Merkel said on Wednesday that Berlin was ready to recapitalise its banks if needed, adding some more reassurance following an agreement on Tuesday by European finance ministers to safeguard banks in the face of mounting concerns about a Greek default.
Further adding to positive sentiment was data showing growth in the U.S. service sector stood steady in September and private hiring picked up, suggesting the economy was not yet slipping into recession.
U.S. crude oil steadied above $79 a barrel on Thursday as a
surprise drawdown in U.S. crude inventories helped offset
pressure from the euro debt crisis. Brent crude