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European markets mixed

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Wall St futures tick down

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Dollar underpinned by high Treasury yields

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Light data diary dominated by PMI surveys

(Updates prices throughout, adds quote in paragraph 18)

By Nell Mackenzie and Wayne Cole

LONDON/SYDNEY, Dec 30 (Reuters) - World shares drifted

lower on Monday as elevated government bond yields prompted

investors to pull out of equities at the end of a year that has

been positive for many regional markets.

MSCI's broadest index of world shares dipped

0.1%, but is still 17% higher for the year.

Trading volumes were thin ahead of the New Year holiday on

Wednesday. Stock markets in Germany, Italy and Switzerland are

shut on Tuesday as well, while those in the UK and France have a

half-day trading session.

European stocks opened lower. The pan-European STOXX 600

index ticked down 0.1% by 1030 GMT, weighed down by the

technology and industrial goods sectors.

This week China reports on the purchasing power of its

manufacturing industry (PMI) on Tuesday, while the U.S. activity

data from the manufacturing industry in December is due on

Friday.

South Korea's main index has suffered a storm of

political uncertainty in recent weeks, and is saddled with

losses of 9% for the year. It was last down 0.2%.

Shares of South Korean budget carrier Jeju Air

hit their lowest level on record on Monday, in the wake of a

plane crash that killed 179 people.

China's blue-chip CSI300 Index closed up roughly 0.5%, to

be up almost 16% on the year with almost all that gain coming in

just two weeks in September after Beijing promised more

stimulus. Hong Kong's benchmark Hang Seng closed roughly

0.2%. lower.

Japan's Nikkei share average retreated on its last trading

day in 2024, down from Friday's five-month high, as investors

locked in profits on the index that rose nearly 20% for the

year.

S&P 500 futures and Nasdaq futures were both

lower by roughly 0.2% following Friday's sell off.

The S&P 500 is up 25% for the year and the Nasdaq up 31%,

which is stretching valuations when compared to the risk-free

return of Treasuries.

Yields on 10-year Treasuries are near

eight-month highs at 4.597% and ending the year around 75 basis

points above where they started, even though the Fed delivered

100 basis points of cuts to cash rates.

"The continued rise in bond yields, driven by the

reassessment of less restrictive monetary policy expectations,

creates some concern," said Quasar Elizundia, a research

strategist at broker Pepperstone.

"The possibility that the Fed may keep restrictive monetary

policy for longer than expected could temper corporate earnings

growth expectations for 2025, which could in turn influence

investment decisions," said Elizundia.

Bond investors may also be wary of burgeoning supply as

President-elect Donald Trump is promising tax cuts with few

concrete proposals for restraining the budget deficit.

Trump is expected to release at least 25 executive orders

when he takes office on Jan. 20, covering a range of issues from

immigration to energy and crypto policy.

"Changes to immigration, trade, and fiscal policy under the

second Trump administration will likely be meaningful but stop

short of some of the more dramatic proposals," said a Goldman

Sachs note on Sunday night by David Mericle and Alec Phillips.

Widening interest rate differentials have kept the U.S.

dollar in demand, giving it gains of 6.5% for the year on a

basket of major currencies.

The euro held steady on Monday but this year so far has lost

more than 5% on the dollar to last stand at $1.0436.

The dollar held near a five-month top on the yen at 157.79

, with only the risk of Japanese intervention preventing

another test of the 160.00 barrier.

The strength of the dollar has been something of a burden

for gold prices, though the metal is still 27% higher for the

year so far at $2,612 an ounce.

Oil has had a tougher year as concerns about demand from

China and a likely influx of supply from the U.S. in 2025, kept

a lid on prices and forced OPEC+ to repeatedly extend a deal to

limit supplies.

Brent fell 19 cents to $73.98 a barrel, while U.S.

crude fell 26 cents to $70.34 per barrel.