Asian Stocks Take Cue From Overseas Gains

Asian shares glided higher in early trading on Wednesday, taking their cues from overseas gains, although investors are cautiously watching to see whether renewed selling in crude oil futures will dent sentiment.

"After a strong U.S. and European session, Asian markets are all looking for further gains today," Angus Nicholson, market analyst at IG in Melbourne, said in a note to clients.

"Volumes have been very light at the moment, but that has seemingly been positive news for markets across the region," he said.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent, on track for a monthly gain of 0.4 percent though down nearly 12 percent for the year.

Australian shares were up 0.9 percent.

On Wall Street, major U.S. indexes each gained more than 1 percent. All 10 major S&P sectors ended with gains, led by a 1.34-percent rise in the technology sector, which lifted the S&P 500 to a modest increase for the year.

Japan's Nikkei was up 0.6 percent, poised to gain over 9 percent for the year, though down more than 3 percent for December.

U.S. crude futures began Asian trading under pressure, and were last down 1.7 percent at $37.23.

U.S. crude and Brent jumped 3 percent overnight, taking back the ground lost in the previous session as colder weather forecasts raised expectations of more demand.

But weekly data from industry group the American Petroleum Institute (API) showed a rise of almost 3 million barrels in U.S. crude inventories, defying expectations of no change and rekindling fears of a supply glut.

Higher U.S. Treasury yields underpinned the dollar.

The yield on benchmark 10-year U.S. Treasury notes stood at 2.299 percent in early Asian trade, compared with its U.S. close of 2.307 percent on Tuesday.

The yield on the U.S. two-year note closed at 1.095 percent on Tuesday after earlier touching its highest level since April 2010.

The dollar index, which tracks the greenback against a basket of six rival currencies, was up 0.1 percent at 98.196.

The index rose to nearly a one-week high of 98.413 on Tuesday, from a nearly two-week low earlier in the session. It is up 8.8 percent for the year, though down nearly 2 percent for the month as investors pare their dollar-long positions after the U.S. Federal Reserve's widely anticipated interest rate increase earlier in December.

The dollar edged up slightly to 120.50 yen, while the euro edged up 0.1 percent to $1.0930.

(Editing by Sam Holmes)