GLOBAL MARKETS-Asian shares extend gains; oil falls below $40

* Asian shares gain for 2nd day on resource-related firms

* Oil dips below $40 but Middle East uncertainty remains

* Nikkei .N225 drops 42 pct in 2008; worst year on record

* JGB 10-yr yield hits 5-year low, Treasuries up (Updates with latest prices, European outlook, new byline)

By Rafael Nam

HONG KONG, Dec 30 (Reuters) - Asian shares advanced for a second consecutive session on Tuesday, led again by resource firms that could benefit from a sharp rebound in oil prices as Israel continued its attacks on Islamic group Hamas.

Oil and gold gave up some of their recent gains, though analysts said prices could be underpinned in the short-term by the uncertainty in the Middle East.

Those developments are also extending a rally in safe-haven government bonds, while hitting the U.S. dollar on worries about oil supplies.

European shares were also set to rise, as most of the region's bourses head into the last full-day session of 2008.