Asian stocks climb in light trade as weaker US dollar boosts gold, STI up 0.4%

TOKYO (BLOOMBERG) - Asian stocks climbed amid reduced volumes on Tuesday (Dec 29) as investors count down to the end of a turbulent year for the region's markets. Gold rose as the US dollar weakened and industrial metals in London retreated amid renewed concern about China's slowing economy.

The MSCI Asia Pacific Index added 0.4 per cent by 2:12 pm in Tokyo, with Japan's Topix index advancing 0.8 per cent and South Korea's Kospi little changed. Gains by Australian banks offset losses by the big miners, Rio Tinto and BHP Billiton, with the S&P/ASX 200 Index rising 1.2 per cent as trade resumed after Christmas holidays.

Singapore's Straits Times Index was 0.42 per cent at 2,887.45 as at 1: 35 pm.

The MSCI Asia Pacific Index is heading for its first back- to-back annual loss since 2002 as a deceleration in the region's biggest economy and the rout in oil and commodity prices undermined earnings. The gauge climbed on Tuesday, with volumes across the region below the average for the time of day.

Crude was steady after retreating more than 3 per cent on Monday. Gold climbed 0.3 per cent as the Bloomberg Dollar Spot Index headed for a two-week low. Aluminum led losses on the London Metal Exchange.

"Commodity related sectors continue to be a drag," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. "Whenever the weakness in oil regains market attention, it weighs on sentiment. Movement in Chinese shares will continue to have an effect on other markets."

The Shanghai Composite Index fluctuated after tumbling on Monday as slumping industrial profits added to concern that looming changes to the country's listing regime and the expiration of a share-sale ban will hurt demand for its stocks.

The global oil glut and weakness in the world's second-largest economy are driving Bloomberg's gauge of commodity prices toward its biggest annual drop in seven years, undermining corporate earnings and hindering central banks' struggle to ignite inflation.

The Bloomberg Commodity Index is down 25 per cent in 2015, and other asset classes are also set to post declines. The MSCI All-Country World Index, which tracks developed and emerging equity markets, has slumped 3.9 per cent, while global bonds have lost 2.4 per cent, according to a Bank of America Merrill Lynch index. A measure tracking world currencies fell 2.3 per cent.

Standard & Poor's 500 Index futures climbed 0.2 per cent. The S&P 500 dropped 0.2 per cent on Monday, after earlier falling as much as 0.8 percent. With just three trading days left in the year, the US benchmark is little changed for 2015. Volume on US exchanges was about 31 per cent lower than the three-month average.

FTSE 100 Index futures were flat ahead of London's first post-Christmas trading. In Europe on Monday, the Stoxx Europe 600 Index sank 0.5 per cent as all but one industry group declined. The index is heading for its worst December since 2002 after an addition in European Central Bank stimulus fell short of investor expectations and energy and commodity producers deepened their losses.

West Texas Intermediate swung between gains and losses. The contract slumped 3.4 per cent in New York Monday as Iran's plans to add supply as soon as it is allowed scuttled last week's rally. WTI for February delivery slipped US$1.29 to settle at US$36.81 a barrel on the New York Mercantile Exchange. The volume of all New York oil futures traded was more than 50 per cent below the 100-day average Monday.

Gold for immediate delivery climbed to US$1,072.18 an ounce. Gold is heading for a third annual decline as expectations for tighter monetary policy in the US curbed demand for the metal, which doesn't pay interest.