HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China although oil gave back some of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.
The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> was up 0.3 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff". Japan's Nikkei 225 <.n225> rose 0.7 percent.
Data from China showing the services sectors expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares <.hsce> over the past month.
The China Enterprises index <.hsce> rose 0.4 percent while Hong Kong's Hang Seng index <.hsce> was up 0.2 percent and hovered near its highest since June 2011.
"China looks like its improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.
"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace," said Keilland.
Onshore Chinese markets will resume trading in the new year on Friday.
Australian stocks <.axjo> rose for a second straight day and were up 0.6 percent at a 19-month high, with mining giants Rio Tinto
But South Korea's Kospi <.ks11> underperformed the region, falling 0.4 percent as automakers and exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.
In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.
"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.
The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.
The U.S. dollar rose 0.3 percent <.dxy> against a basket of major currencies.
President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after the hard-fought deal halted a round of automatic fiscal tightening that threatened to push the world's largest economy into recession.
Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping below $112 a barrel and U.S. crude futures down 57 cents to $92.55.
"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."
(Reporting by Vikram Subhedar; Editing by Kim Coghill)
Asia stocks eke out gains on China hopes, oil eases
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Asia stocks eke out gains on China hopes, oil eases
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Asia stocks eke out gains on China hopes, oil eases
