Stocks slip but Japan bucks trend; dollar wobbles
Asian stocks dipped on Monday amid a lack of immediate directional cues in light year-end trade, although Japanese shares managed to rise following a rebound in crude oil prices from multiple-year lows.
Investors across asset markets were without some of the usual leads as most global markets were closed on Friday for Christmas. The British markets will remain closed on Monday, while those in Germany and France will reopen.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gave up earlier modest gains and were down 0.4 percent. The index was on track for an 11 percent loss this year.
Shanghai shares .SSEC fell 1.3 percent on Monday, with banking shares leading the fall, following weak Chinese industrial output data. Hong Kong's Hang Seng dropped 1.0 percent .HSI. South Korea's KOSPI .KS11 fell 1.1 percent.
Stocks affiliated with Samsung Group fell after the South Korean conglomerate said on Sunday its battery-making arm Samsung SDI will sell shares in sister firm Samsung C&T Corp to comply with regulatory requirements.
Japan's Nikkei .N225 rose 0.7 percent, with soft domestic production and retail data offset by a rebound in crude oil prices.
"Disappointing production and retail figures have crushed the chances of any sort of photo-finish for the Nikkei this year," said Martin King, co-managing director at Tyton Capital Advisors.
"But oil holding in the high 30s will provide some welcome respite for energy companies at year-end and see the index close out 2015 in 19,000 point territory."
The Nikkei, lifted in part by Japanese Prime Minister Shinzo Abe's reflationary policies, was headed for its fourth straight year of gains.
U.S. crude fell 0.9 percent to $37.74 CLc1 a barrel but remained significantly above $33.98, its lowest level since February 2009, after surging last week on falling inventories, reduced drilling and the lifting of a ban on most U.S. crude exports.
Brent crude LCOc1 edged down 0.4 percent to $37.73 a barrel after rising nearly 3 percent last week to move away from an 11-year trough.
Still, the warmer-than-usual winter affecting many parts of the world, attributed to the El Nino weather pattern, meant potentially less crude demand for heating purposes. Analysts also pondered the wider economic impact of the weather pattern.
"The United States is experiencing a winter with record high temperatures and the focus is on whether first quarter economic activity would be negatively affected because of this," wrote Shinichiro Kadota, chief Japan FX strategist at Barclays in Tokyo.
"U.S. data related to housing and private consumption, which are swayed by winter conditions, bear watching," Kadota said.
In currencies, the dollar fetched 120.46 yen, wobbling near its two-month low of 120.05 struck on Friday. The dollar has lost some steam, with investors locking in profits after the Federal Reserve this month hiked interest rates for the first time in nine years.
Late last week, a weaker-than-expected U.S. index on employment cost also weighed on the greenback. The currency market will be keeping an eye on coming U.S. data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
The euro was flat at $1.0973 EUR=, having spent the past two sessions in a tight $1.0944-$1.1000 range.
The Australian dollar was down 0.2 percent at $0.7267 AUD=D4 but still within striking distance of a two-week peak of $0.7295 scaled on Friday. Relatively high Australian yields have recently worked in favour of the currency.