We study the asymptotic outage performance of incremental redundancyautomatic repeat request (INR-ARQ) transmission over the multiple-input multiple-output (MIMO) block-fading channels with discrete input constellations. We first show that transmission with random codes using a discrete signal constellation across all transmit antennas achieves the optimal outage diversity given by the Singleton bound. We then analyze the optimal SNR-exponent and outage diversity of INR-ARQ transmission over the MIMO block-fading channel. We show that a significant gain in outage diversity is obtained by providing more than one bit feedback at each ARQ round. Thus, the outage performance of INR-ARQ transmission can be remarkably improved with minimal additional overhead. A suboptimal feedback and power adaptation rule, which achieves the optimal outage diversity, is proposed for MIMO INR-ARQ, demonstrating the benefits provided by multi-bit feedback.