GLOBAL MARKETS-Asian shares lower as investors book decade-end profits

* MSCI Asia ex-Japan -0.39%, still up 16% on year

* Profit taking drives losses

* U.S., China expected to sign deal soon - White House

officials

* China December manufacturing activity better than expected

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith

SHANGHAI, Dec 31 (Reuters) - 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 .MIAPJ0000PUS was down

0.39%, its weakest performance since Dec. 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 .MIWD00000PUS .

Australian shares .AXJO were 1.69% lower and Hong Kong's

Hang Seng .HSI 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 U.S.-China trade war

remained a positive factor for investors into the new year.

The White House's trade adviser on Monday said the

U.S.-China Phase 1 trade deal would likely be signed in the next

week, but said confirmation would come from President Donald

Trump or the U.S. 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 .CSI300 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 .DJI down 0.64% to 28,462.14, the S&P

500 .SPX 0.58% lower to 3,221.29 and the Nasdaq Composite

.IXIC off 0.67% to 8,945.99.

U.S. Treasury futures were lower TYc1 , reflecting an

implied yield of 1.82%. That followed a rise in benchmark U.S.

Treasury yields on Monday that pushed the U.S. 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 JPY= , and the euro strengthened EUR= 0.16%

to buy $1.1215.

The dollar index .DXY , which tracks the greenback against

a basket of six major rivals, was 0.06% lower at 96.686.

U.S. 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 XAU= was changing hands at

$1,520.16 per ounce, up 0.33%. GOL/