By Kane Wu

HONG KONG (Reuters) - Asian stocks wobbled on Tuesday as investors held tight ranges awaiting clues on the interest rate outlook and wary of risks about China's shaky economic recovery and developments in Russia after an aborted mutiny.

MSCI's gauge of Asia Pacific stocks outside Japan was up 0.08% at 0126 GMT, after dropping 0.06% an hour earlier. Japan's benchmark Nikkei average fell as much as 1%.

"Asian equities are set for a downturn on Tuesday, prompted by Wall Street's risk-aversion behavior," said Anderson Alves, a global macro analyst at ActivTrades.

All three major U.S. stock indexes ended in the red on Monday, with megacap momentum stocks pulling the tech-heavy Nasdaq down the most.

The Dow Jones Industrial Average fell 0.04%, the S&P 500 lost 0.45% and the Nasdaq Composite dropped 1.16%.

"It's significant to mention that a sense of caution prevails among investors with respect to the global economy's trajectory over the forthcoming months," Alves said. "The threat of a potential recession during a high-interest rate cycle, enforced by central banks, could significantly impact both the U.S. and Europe, thereby influencing global trade, financing conditions, and demand."

Hang Seng Index and China's benchmark CSI300 Index opened up 0.3% and 0.1%, respectively, shaking off losses from the past four sessions.

S&P Global (NYSE:SPGI) on Monday cut its forecast for China's economic growth to 5.2% in 2023, down from an earlier estimate of 5.5%, underscoring the uneven nature of the country's recovery from the pandemic.

It was the first time a global credit ratings agency has cut China's forecast this year and follows lowered predictions by major investment banks including Goldman Sachs (NYSE:GS).

Redmond Wong, market strategist Greater China at Saxo Markets, said investors are also closely watching end-of-quarter rebalancing flows in U.S. stocks

"The impending rebalancing is expected to have a notable impact on the market dynamics, as traders prepare for potential shifts in stock prices and overall market sentiment," Wong said. "With the month and quarter end coinciding, the magnitude of these rebalancing flows adds an element of anticipation and uncertainty for market participants."

Geopolitical turmoil also dampened risk appetite following an aborted mutiny in Russia on the weekend, which appeared to reveal cracks in President Vladimir Putin's grip on power.

"Although the situation has subsided, any subsequent insurrection against Russia remains a potential cause for concern, potentially triggering a defensive reaction in safe-haven assets," said Alves of ActivTrades.

In energy markets, U.S. crude went up 0.61% to $69.79 a barrel while Brent gained 0.53% to $74.57 a barrel, wiping out earlier gains.

Spot gold added 0.32% to $1,928.9 an ounce.

In currency markets, the dollar index was up 0.029%.

Ten-year U.S. Treasury yields were steady in early Asia trade at 3.7154%. Two year yields fell 7 basis points to 4.671%.