Asian stocks finished the Christmas Eve session mixed with markets closing early, in holiday-thinned trade Wednesday.
Further deterioration in the housing market and worry over weak consumer spending in the final stretch of the Christmas shopping season weighed on Wall Street Tuesday, sending the Dow Jones 1.2 percent lower and the S&P 500 sliding 0.97 percent.
The U.S. dollar drifted higher against the yen in thin pre-holiday trade on Tuesday, as investors locked in profits on the Japanese currency's recent steep gains. Oil futures were traded at $39 a barrel in the Asian session.
Japan's Nikkei 225 Average dropped 2.4 percent as investors sold Toyota Motor and auto-related stocks after the world's biggest automaker forecast its first-ever annual operating loss.
Seoul shares closed down 1.3 percent, ending lower for a third straight session, as signs of a prolonged slump in major economies prompted investors to sell down heavily chipmaker Hynix Semiconductor and Daewoo Shipbuilding. But a rebound in the won currency, which dealers attributed to intervention by South Korean authorities, revived buying into top exporters such as Samsung Electronics, which finished up 0.8 percent. Ssangyong Motor wiped out earlier losses to end 0.99 percent higher on a report that it would receive financial aid from its top shareholder China's SAIC Motor this week. But Ssangyong could not confirm the report.
Australian stocks cheered in the Christmas holidays with a 1.4 percent gain, as hopes economic bad news had been more than priced in sent shares such as miner Rio Tinto higher. Global miner Rio Tinto paced the gains, advancing 1.2 percent after having slipped nine percent in the past two days. Rival BHP Billiton also rose 1.2 percent after having dropped nearly five percent in the past two days. The gains came even after copper and nickel prices dropped,
news that Spain had joined a growing list of countries in recession and data that showed U.S. home sales and prices both fell at a record pace last month.
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Hong Kong shares ended slightly lower, slipping for a fourth day in a row, amid slender volumes as investors cashed out of the market ahead of a long weekend but airline stocks soared on
weak energy prices. Airline stocks bucked the downdraft in the broad market to notch up strong gains amid sliding crude oil prices. Cathay Pacific, Asia's third-largest carrier, rose 4 percent while Air China, the nation's flagship airline, jumped 1.3 percent.
Singapore's Straits Times Index ended 0.7 percent higher on thin volumes in a shortened pre-Christmas trading session. Among gainers, Noble Group ended 8.0% higher as investors bought into the shares following a recent fall.
China's Shanghai Composite Index was over 1 percent lower, weighed down by looming expiries of lock-up periods for a large volume of shares, but airlines benefited from weaker oil prices and news of possible consolidation in the industry. Airlines bucked the market's downtrend on a combination of sliding oil prices and media reports of an imminent merger between two domestic airlines. The official Shanghai Securities News quoted unnamed sources as saying a merger of Shanghai Airlines and China Eastern Airlines was expected to proceed soon, most likely after Shanghai Airlines receives an injection of government aid.