* Investors wary as Korean tensions mount
* Markets thin with year-end holidays in sight
* Euro pressured, no solution for European debt crisis
By Ian Chua
SYDNEY, Dec 20 (Reuters) - Asian shares eased on Monday,
lead by a 0.8 percent drop on the Seoul market as tensions
heightened on the Korean peninsula, but firm commodity prices
underpinned appetite for mining stocks like BHP Billiton.
Investors also gave the euro a wide berth after last
week's massive five-notch credit rating downgrade of Ireland
by Moody's and as euro zone leaders failed to reassure markets
on how they will tackle the debt crisis in the short term.
However, trading was light as the year-end holidays
loomed, with investors reluctant to do much, having taken some
profits recently when Asian stocks hit 2-1/2 year highs.
"People have already put the cue in the rack this year,"
said Ben Potter, research analyst at IG Markets.
Asia Pacific stocks, as measured by MSCI
was 0.1 percent lower, while the index excluding Japan
eased 0.2 percent.
Japan's Nikkei shed 0.3 percent and South Korea's
KOSPI fell 0.8 percent, but Australia's S&P/ASX 200
index nudged up 0.1 percent, thanks to gains in the
miners.
BHP Billiton and fellow global miner Rio Tinto
were both up around 0.5 percent as copper
climbed almost 2 percent to $9,233 a tonne, within easy reach
of a record high $9,267.50 set last week.
Analysts generally expect strong growth in emerging
economies to keep commodities in demand next year. JPMorgan
forecasts a 17 percent return for the S&P commodities index,
or the GSCI , over the next 12 months.
WILTING EURO
The euro plumbed a two-week low at $1.3125 and looked set
to test support at $1.3100-3090 , while the dollar edged
up 0.1 percent versus a basket of major currencies.
"The dollar is generally supported this morning by
tensions in the Korean peninsula and concerns over European
debt problems," said Tsutomu Soma, senior manager at Okasan
Securities.
"The euro has been under pressure, especially since the
downgrading of Ireland last week. ... Selling pressure could
increase should the euro break $1.3."
Despite the mildly negative start to the week, MSCI's Asia
Pacific stock index is still up some 11 percent so far this
year, compared with a rise of around 8 percent for the MSCI
world equity index .
"Equities are set to post double digit returns in 2011
driven by strong growth and continued risk premia
compression," predicted JPMorgan analysts.
"Together with rising fears of inflation and the lack of
safety in public-sector debt, the probability is rising that
end investors will again turn to equities as the mainstay of
their long-term investments."
(Additional reporting by Miranda Maxwell in Melbourne and
Chikafumi Hodo in Tokyo; editing by Kazunori Takada)
