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Nikkei closes out best year since 1972

Nikkei closes out best year since 1972

The Nikkei 225 gained 0.7 percent to 16,291.31 on its last trading day of the year.

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LONDON • Japan's main stock index rose Monday to end 2013 at its highest level in more than six years, though most other markets were lackluster, with Germany's DAX dipping to close the year just short of its record high.

The Nikkei 225 gained 0.7 percent to 16,291.31 on its last trading day of the year. That leaves it with a gain of 56.7 percent over the past 12 months, making 2013 its best year since 1972.

Prime Minister Shinzo Abe, whose government launched a huge stimulus effort to drag the economy out of a two-decade period of stagnation, took time out from vacation to celebrate the trading close.

"Thanks to our efforts, the economy went from minus to positive," Abe said. With winter bonuses up by several hundred dollars on average, he said, "You have to use that money, keep it moving."

Elsewhere, markets were more cautious. Germany's DAX drifted 0.4 percent lower on its last trading day, to 9,552.16, leaving it shy of its record high hit last week.

French and U.K. markets, which will trade for a half day on Tuesday, also closed slightly lower, with the CAC-40 down 0.1 percent at 4,275.71, and the FTSE 100 down 0.3 percent at 6,731.27.

In the U.S., the Dow was flat at 16,483.88, while the S&P 500 was down 0.1 percent at 1,840.22.

This was a banner year for many markets, with the DAX up 25.5 percent, the CAC index up 17.4 percent and the FTSE 100 gaining 14 percent. But none matched the Nikkei, which soared on renewed confidence in the economy.

Easy liquidity from government spending and monetary policies aimed at fueling inflation boosted shares, though the potential for continued strong gains remains uncertain.

For now, Abe can point to the share rally as evidence his "Abenomics" policies are yielding results.

"The Nikkei still looks to round off what has been an astonishing year ... its best year since 1972," Chris Weston of IG Markets said in a commentary, noting that the gain in that year was 92 percent and unlikely to ever be beaten.

"For those looking for volatility, the Nikkei will remain a major focus for traders in 2014," he said.

For the rest of Asia, 2013 has turned out to be much less exuberant.

Hong Kong's Hang Seng Index, burdened by rising concern over debt and slowing growth in mainland China, has gained just 2.4 percent this year. On Monday, it edged 0.2 percent lower to 23,209.25.

The Shanghai Composite Index fell 7 percent this year and extended that loss Monday, drifting 0.1 percent lower to 2,098.77.

Shares rose in Australia, South Korea, Singapore, Indonesia, Malaysia, Taiwan, mainland China and New Zealand. India share prices fell, while markets in Thailand and the Philippines were closed for holidays.

In foreign exchange markets, the dollar was trading 0.1 percent lower at 105.05 Japanese yen, while the euro rose 0.4 percent to $1.3815.

The price of crude oil dipped back below $100, with the benchmark U.S. contract for February delivery down 77 cents to $99.55 in electronic trading on the New York Mercantile Exchange.

Kurtenbach contributed from Tokyo.

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