Asian shares easier in thin trade

TOKYO: Asian shares eased today in low volume with many market players
away for year-end holidays, while oil slipped after surging the day
before on concerns about supply disruptions after Iran threatened to
stop the flow of oil from the Gulf.

MSCI's broadest index of
Asia Pacific shares outside Japan fell 0.3 per cent, keeping it on
track for a yearly loss of about 17 per cent, underperforming a 12 per
cent decline in European shares and a 9 percent drop in world stocks.


Japan's Nikkei stock average opened down 0.17 per cent in light trading, on track for a 17 per cent decline this year.

US
stocks ended little changed on Tuesday after low market liquidity
dampened activity and snapped a four-day rally that turned the broad
Standard and Poor's 500 Index positive for the year.

"More
people wanting to bring their positions to neutral ahead of the new
year's holidays than looking for bargains is keeping prices depressed
in low volumes," said Tetsuro Ii, the president of Commons Asset
Management.

US crude oil was down 0.2 per cent to
US$101.16 a barrel, after surging more than US$2 to US$101.77 on
Tuesday on concerns over supply disruptions from the Middle East.

Iran
threatened to cut off a key oil shipping route through the Strait of
Hormuz if foreign sanctions are imposed on its oil exports.

Aside from oil, the immediate impact to financial markets was limited.

"(Iran's
threat) won't have a big effect, because foreign exchange markets are
stable. Unless there is a big move there, it won't be reflected in
stocks," said Kenichi Hirano, operating officer at Tachibana
Securities.

The euro was steady at US$1.3067, staying above
its 11-month trough of US$1.2945 hit earlier this month, but remained
vulnerable ahead of Italy's debt sale on Thursday.

Italy's
planned debt sale of up to 8.5 billion euros on Thursday will provide a
gauge for investor appetite. Italy faces around 100 billion euros in
bond redemptions and coupon payments between January and April.

The
direction of yields on highly-indebted euro zone sovereigns remains a
key market focus in 2012, as soaring public financing burden threatens
to hurt growth and further derail fiscal reforms.

Interbank
euro lending rates eased on Tuesday in a sign the European Central
Bank's massive injection of funds via a long-term lending operation was
having a positive effect.

But despite the ECB's move aimed
at encouraging lending, many believe banks will likely use the funds
to repay their debt and clean their balance sheet of bad assets first,
to defend themselves from market turmoil stemming from the euro zone
debt crisis, rather than lend and help spur European economies.

In
the United States, more data emerged to support views the economy was
on track for recovery, with improving labour market conditions lifting
US consumer confidence to an eight-month high in December. - Reuters