Asian shares slipped on the last trading day of the decade, echoing falls on Wall Street, as investors locked in gains made since the United States and China reached a preliminary trade deal earlier this month.
Early in the Asian trading session, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.39%, its weakest performance since December 4. For the month, the index is still up 5.7%.
The index has gained 16% this year, a sharp turnaround from a 16.2% drop last year but lagging a 23.8% year-to-date gain in MSCI's global share index.
Australian shares were 1.69% lower and Hong Kong's Hang Seng dropped 0.32%.
"We are seeing some profit-taking into year-end," said Ryan Felsman, senior economist at CommSec in Sydney, adding that progress on resolving the 17-month-long US-China trade war remained a positive factor for investors into the new year.
The White House's trade adviser on Monday said the US-China Phase 1 trade deal would likely be signed in the next week, but said confirmation would come from President Donald Trump or the US Trade Representative.
"We think that the global growth situation is improving, we're seeing better industrial profits in China ... green shoots in the manufacturing sector on the back of an improvement in the trade situation is a key catalyst going forward," he said.
While easing trade concerns and steps toward a resolution of Britain's exit from the European Union have helped reduce some near-term market uncertainty, investors remain uneasy with a recession seen as inevitable in the new decade.
Positive Chinese manufacturing data, which showed factory activity in China expanded for a second straight month in December, nudged China's blue-chip CSI300 index 0.1% higher, extending the more than 33% gain seen this year.
China's modest gains built on Monday's rally, which was driven by a combination of strong retail sales growth and hopes that a new benchmark for floating-rate loans could lower borrowing costs.
Markets in Japan and South Korea were closed for a holiday.
The falls in Asia came after profit taking pushed the Dow Jones Industrial Average down 0.64% to 28,462.14, the S&P 500 0.58% lower to 3,221.29 and the Nasdaq Composite off 0.67% to 8,945.99.
US Treasury futures were lower TYc1, reflecting an implied yield of 1.82%. That followed a rise in benchmark US Treasury yields on Monday that pushed the US two-year, 10-year yield curve to its steepest in 14 months.
The dollar continued to weaken against the yen, dropping 0.12% to 108.73, and the euro strengthened 0.16% to buy $1.1215.
The dollar index, which tracks the greenback against a basket of six major rivals, was 0.06% lower at 96.686.
US crude CLc1 dipped 0.18% to $61.57 a barrel and Brent crude LCOc1 shed 0.15% to $66.57 per barrel.
Gold continued its rally on a weakening dollar. On the spot market, the precious metal was changing hands at $1,520.16 per ounce, up 0.33%.