Asian shares end mostly higher as Santa delivers glimmer of green

A trader works on the floor of the New York Stock Exchange.
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A trader works on the floor of the New York Stock Exchange.

A full-blown Santa Claus rally remained elusive, but Asian markets ended mostly a tad higher Tuesday, as the jolly fat man delivered a glimmer of green in the little time left to trade before the holiday.

The few traders left in the market may be looking past any Christmas cheer to concerns about the outlook for the following year.

"The prospect of a persistently strong dollar, sluggish global growth and lower commodity prices in the first half of the year means that earnings and stocks could suffer," Kathy Lien, managing director for foreign-exchange strategy at BK Asset Management, said in a note Tuesday. "We are looking for a correction in equities in early 2016."

Bucking the broader market trend, Japan's shares ended a tad lower after briefly popping into the green in afternoon trade. The Nikkei 225 index ended down 29.32 points, or 0.2 percent, at 18,886.70. Japan's market will be closed Wednesday for the emperor's birthday.

Among declining shares, McDonald's Japan dropped 7.9 percent after the Nikkei business daily reported Monday that the U.S. parent is considering selling a stake in the Japanese business.

Toshiba plunged 12.3 percent, extending Monday's 9.8 drop. After the market close Monday, Toshiba said it expects to post a fiscal year net loss of 550 billion yen ($4.54 billion), larger than a Dow Jones report over the weekend which cited people close to the matter as saying the loss would be around 500 billion yen.

Other big electronics exporters were also lower, with Sony down 1.0 percent, Panasonic off 0.7 percent and Sharp tumbling 2.5 percent.

Shares of beer-maker Kirin dropped 5.8 percent after the company said Monday it expected a full-year net loss of 56 billion yen due to poor performance from its Brazil operations. It was the company's first annual loss since 1949, when the shares were listed.

On the upside, Taisei tacked on 1.6 percent after the announcement Tuesday that the design from the consortium it leads will be used for the new stadium for the Olympics.

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On the upside, Australia's shares rose, with the S&P ASX adding 7.65 points, or 0.15 percent, to 5116.70, supported as some energy shares continued a counter-intuitive rally for a second day despite oil prices' unending pain.

LNG player Santos rose 3.1 percent. The share may be getting a sentiment boost from expectations that the U.S. may be facing a cold January after an unseasonably warm December limited demand for natural gas; in the U.S. overnight, natural gas futures were more than 8 percent higher. Additionally, Dow Jones reported that Chevron has lined up a Chinese buyer for LNG from its Australian project, suggesting continuing demand.

Another LNG player, LNG ended down 2.7 percent after tacking on 8.8 percent on Monday.

The late-year rally in hard-hit energy shares may reflect expectations the oil price is nearing its nadir.

"A strong dollar, weak global demand and high inventories have caused oil prices to collapse this year and while prices could fall further in the near term as the U.S. ends its 40 year ban on oil exports and sanctions are lifted on Iran, when the dollar peaks, commodities will bottom," BK Asset Management's Lien said. "The price of oil could fall below $30 a barrel but we do not see much weakness beyond that and by the end of the year we expect prices to settle closer to $40."

WTI crude futures for February delivery were up 0.8 percent, or 29 cents, at $36.10 in Asia trade after dipping Monday below $34 to hit a fresh near-seven-year low. Brent for February deliver was up 20 cents, or 0.6 percent, at $36.55, after hitting $36.04 a barrel Monday, its lowest since July 2004.

Both Hong Kong and China shares ended higher after wavering between positive and negative territories.

Hong Kong's Hang Seng Index added 38.34 points, or 0.2 percent, to 21,830.02 and the Shanghai Composite gained 0.3 percent, or 9.77 points, to 3652.24, a nearly one-month high.

Banks were mixed, with China Construction Bank's Hong Kong-listed shares down 0.2 percent, while its mainland-listed ones were down 0.7 percent. But the Hong Kong-listed shares of Agricultural Bank of China rose 0.3 percent, while its mainland-listed shares were flat.

Select China property plays were mixed, with Hong Kong-listed China Overseas Land flat, Greentown China down 0.8 percent and Evergrande adding 1.3 percent.

South Korea's shares reversed early losses to close higher in thin trade. The Kospi ended up 11.37 points, or 0.6 percent, at 1992.56 as heavyweight Samsung Electronics tacked on 0.9 percent.

In other markets, Indonesia's rupiah surged against the dollar. The U.S. dollar was fetching as little as 13,530 rupiah at one point, a drop of around 2.7 percent from Monday's high as Reuters cited traders saying the country was seeing inflows into its bonds.

The benchmark 10-year Indonesian bond has seen its yield fall to 8.776 percent Tuesday from a peak of 9.151 percent on December 15. Bond yields move inversely to prices. In recent months, Indonesian bonds have seen inflows from Japanese investors who may be targeting a carry trade as the Japan 10-year government bond is yielding just 0.27 percent.

With less than 2 weeks to the end of the year, U.S. equities kicked off the shortened holiday week with gains.

The Dow Jones Industrial Average closed Monday up 123.07 points, or 0.72 percent, at 17,251.62, the S&P 500 closed up 15.6 points, or 0.78 percent, at 2,021.15 and the Nasdaq Composite closed up 45.84 points, or 0.93 percent, at 4,968.92.

Both the S&P 500 and Dow Jones industrial average are still negative year-to-date, down more than 1.5 percent and 3 percent, respectively.

By's Leslie Shaffer. Follow her on Twitter @LeslieShaffer1