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Mixed day for global shares, Yen gains in thin trade

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Global stocks were mixed on a day when many markets were closed for a holiday. Japanese shares fell as the yen gained against the dollar, while Chinese equities recovered from earlier losses.

The Topix index slipped in Tokyo on trading volumes around 40 per cent below the 30-day average. The Shanghai Composite Index erased a drop of as much as 1.3 per cent; with construction stocks strengthening after the government said it aims to invest 1.8 trillion Yuan (£211.73 billion) in highways and waterways next year. India’s Sensex Index resumed its decline, falling to the lowest in more than a month. The yen advanced for a fourth straight day and the rouble strengthened 1 per cent.

A volatile year for financial markets is drawing to a close as investors assess the post-U.S. election rally that’s added trillions to the value of global equities and lifted the dollar to a multiyear high. U.S. equities are trading near a record and crude oil has climbed to a 17-month peak as traders have endured shocks from the Brexit vote in the U.K. to the U.S. presidential election.

“There are technical indicators flashing certain signs, but there aren’t any events left this year, and I see 2016 ending with little disturbance, and small moves,” said Seiji Iwama, a fund manager with Daiwa SB Investments Ltd. in Tokyo.

Nations from Australia to the U.K. and U.S. observe holidays Monday, while markets in Dubai, Russia and Brazil are among those open.

The Topix index dropped 0.4 per cent in Tokyo. The index briefly erased its loss for the year last week, and is now down 0.6 per cent for 2016. The Nikkei 225 has gained 1.9 per cent this year. The Shanghai Composite Index rose 0.4 per cent. Earlier in the day, it fell to the lowest since October as reports of further curbs on the property market weighed on the sector. President Xi Jinping told a Communist Party meeting last week he isn’t wedded to China’s 6.5 per cent economic growth objective, according to a person familiar with the situation. Russia’s Micex Index rose 0.5 per cent after three straight days of declines. India’s Sensex Index fell 0.7 per cent after Prime Minister Narendra Modi hinted at tax increases on stock market income. Global stocks were little changed last week after reaching an almost 17-month high on Dec. 13.

The yen strengthened 0.2 per cent to 117.06 per dollar. The currency has slipped about 15 per cent from a high in August. The South Korean won gained 0.1 per cent, snapping an eight-day losing streak. The offshore Yuan rose 0.1 per cent to 6.9527 versus the dollar after a 0.2 per cent gain last week. India’s rupee was little changed at 67.8262 per dollar.

Paul

The author Paul