Asian Markets Mixed, Nikkei Ends Miserable Year

Asian markets closed mixed Tuesday in thin year-end trading. Oil prices and shares of resource producers rose as violence in the middle east escalated stirring caution among investors and denting the dollar.

Japanese stocks closed at a seven-week peak in a holiday-shortened session, but wrapped up its worst year on record with a loss of 42 percent after the financial crisis and surging yen drove the country's economy into a recession.

The jump in oil and gold prices drove the dollar lower, though moves were choppy as many market players have already put the finishing touches on their portfolios for the year and have shifted to the sidelines. The euro climbed against the dollar after a volatile session the previous day saw it tumble more than 4 cents from its intraday peak. U.S. crude oil prices were trading above $40 a barrel, rising for a third day but on track to end the year down 60 percent.

The Nikkei 225 Average fell 42 percent in 2008, the worst loss in its 58-year history, though the benchmark gained 1.3 percent on its final half-day of trade. Canon and other exporters gained as the dollar rose slightly against the yen before falling back, while oil and gas field developer Inpex climbed as oil extended gains on concern that Israeli attacks on Gaza could disrupt Middle East crude oil supplies. Toyota Motor bucked the trend by slipping 1 percent, badly hit like the rest of the auto sector -- one of the Tokyo market's worst performing sectors this year -- by the worsening global economy. The Nikkei reopens January 5, 2009.

Seoul shares closed 0.6 percent higher, snapping a five-session losing streak, as the main index responded more sensitively to buying amid lackluster year-end trading and refiners gained on a stronger won currency. The KOSPI's annual loss was the largest since 2000's 50.9 percent.

Australian shares rose 0.9 percent to a near three-week closing peak as firmer copper prices boosted commodity firms such as BHP Billiton, but remain on course for the worst ever annual drop. Like many other global markets, Australian shares are set to post a worst-ever performance in 2008, a year which was marked by extreme volatility amid the financial crisis. But fund managers are hopeful about a recovery next year.

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Hong Kong shares closed 0.6 percent lower, as energy stocks soared on heightened Middle East tensions, but China Eastern Airlines slid as investors locked in gains on a recent rally in the stock. China Eastern Airlines sank 4.7 percent after opening higher on an enhanced government bailout for the ailing air carrier. The increased aid had been anticipated by investors who remain concerned about the airline's ability to ride out a severe global economic downturn.

Chinese stocks closed nearly 1 percent down in light trade with blue chips trading sluggishly. Three steel companies fell sharply after they announced a merger through share swaps that would create the country's largest listed steel maker. Tangshan Iron & Steel plunged its 10 percent limit, Chengde Xinxin Vanadium & Titanium lost 7.45 percent, and Handan Iron & Steel dropped 6 percent. The shares had been suspended for several months pending the merger announcement, and the overall stock market had fallen sharply in that time. Nevertheless, analysts said the market was not very enthusiastic about the merger.

Singapore's Straits Times Index closed 0.5 percent lower with CapitaMall Trust slumping after an 87.5 percent spike late Monday.