Stock markets across Asia saw modest gains on 29 December as investors shrugged off overnight losses on Wall Street. China's benchmark Shanghai Composite share average edged up by 0.2% to 3,539.87 points at mid-day, rebounding from a 2.6% fall in the previous session.

Shares in Hong Kong followed the mainland higher, with the Hang Seng advancing 0.3% to 21,989.21. Angus Nicholson, analyst at trading firm IG in Melbourne, said overnight falls in the prices of both Brent and US light crude oil had set up Asian markets for a subdued trading day.

US light crude dropped for the first time in five days on 28 December following reports that Iran planned to increase its oil exports by 500,000 barrels a day once Western-imposed sanctions were lifted. "Oil prices look likely to continue in their depressed state if Iran is able to ramp up its exports at such a rapid rate," Nicholson said.

Energy stocks in the US were hit by the slump in oil prices, with the Dow Jones and the S&P 500 share averages down 0.1% and 0.2% respectively.

Rest of Asia

In Australia, the S&P/ASX 200 index climbed 0.9% to 5,253.80 points as trading resumed in the country following a four-day break. Citing data from the Australian Retailers Association, IG said consumers spent A$46.8bn (£22.8bn; €31bn; $34bn) in the six weeks leading up to Christmas.

Australian shoppers are expected to spend A$16.8bn more through to 15 January.

Store window, Sydney
Australian retailers are expected to witness a strong end to the year Reuters

"If these numbers hold up, then Australian retail sales are set to expand by over 4% year-on-year in both November and December – a noticeable pick-up from the slowdown in Q3," Nicholson said.

"While consumption growth is far from cancelling out the ongoing decline in capex spending, the clear uptrend discernible in a range of consumer indicators is pointing to steady and expanding consumption in 2016."

Elsewhere, Japan's Nikkei benchmark index was up by 0.5% at 18,970.86, while Seoul's Kospi was flat at 1,963.60.