(Adds U.S. stock market futures)
* Stocks up, volumes thin in handful of markets open
* Yen weakens after disappointing data
* Oil prices gain ahead of expected output cuts
By Patrick Graham
LONDON, Dec 27 Share prices inched higher on
Tuesday as trading in some of the world's major financial
markets resumed after a Christmas break, with oil and the dollar
also rising marginally.
Concerns about Italian banks, Chinese growth and U.S.
President-elect Donald Trump's protectionist bent look set to
keep investors on edge into the start of 2017.
But expectations the new administration will splash out on a
fiscal boost for the U.S. economy also has markets expecting
inflation and more growth overall that should benefit companies
Data on Tuesday showed Chinese industry racked up its
strongest profit growth in three months in November, suggesting
the world's second-largest economy was improving.
In Japan, however, core consumer prices fell in annual terms
for the ninth month as household spending slumped.
"Markets have calmed down a lot since the U.S. election and
the decisions by the ECB and Fed (earlier in December)," said
Daniel Lenz, a bond market strategist with DZ Bank in Frankfurt.
"There is a feeling that some of the expectations after the
Trump election may have been exaggerated and now it is a
question of waiting to see what the U.S. government will look
like when it finally takes shape."
Germany's DAX and France's CAC 40 both
gained just over 0.1 percent and U.S. markets were seen opening
similarly. British markets were closed for a holiday, along
with those in Australia, New Zealand and Hong Kong.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan had risen 0.2 percent while
Japan's Nikkei closed little changed.
"It is the time of the year when markets trade with hushed
tones," Jingyi Pan, market strategist at IG, wrote in a note.
"The magnitude of moves could remain capped with thin market
trades expected to remain the case."
China's CSI 300 index was down 0.1 percent and the
Shanghai Composite slipped almost 0.2 percent, despite
the upbeat industrial data.
The yen fell following the inflation numbers but was
still around 1 yen stronger than lows hit after the U.S. Federal
Reserve raised dollar interest rates two weeks ago.
In a currency market expected to trade conservatively into
the end of the year, strategists say they will be watching
chiefly for any sign of a squeeze in the cost for banks of
borrowing dollars relative to other currencies.
Such costs - called the cross currency basis - have been
rising and could support the dollar over the next few days.
"The rise in the euro dollar basis is an argument for dollar
strength. Plus you have the fundamental factors going into the
beginning of next year that point (that way)," said Lutz
Karpowitz, a strategist with Commerzbank in London.
"But so far it really has been quiet."
U.S. crude rose 0.4 percent to $53.23 a barrel,
supporting the stronger tone ahead of Wall Street opening.
(Reporting by Nichola Saminather, Abhinav Ramnarayan and Danilo