Royal Navy has a bad day in the Mediterranean. Overnight, 3 manned torpedoes (maiali) from Italian submarine Sciré enter the naval base at Alexandria, Egypt. They plant limpet mines which explode at 6AM, sinking battleships HMS Valiant and HMS Queen Elizabeth (9 killed) in shallow water (out of service for 1 year). Destroyer HMS Jervis is also badly damaged by the explosion. All 6 Italian torpedo-riders are captured.
At 1 AM, British cruisers HMS Neptune, Aurora & Penelope and destroyers HMS Kandahar, Lance, Lively and Havock (seeking an Italian convoy bound for Tripoli) run into a new minefield 30 miles Northeast of Tripoli. HMS Aurora & Penelope are damaged immediately. Between 1 and 4 AM, HMS Neptune hits 4 mines and sinks (766 killed, 1 survivor Leading Seaman Norman Walton found by an Italian torpedo boat on December 24). HMS Kandahar hits a mine attempting to assist (79 killed, 104 taken off) and will be scuttled next day.
Battle of convoy HG-76. After sinking 2 U-boats in the last 2 days, British destroyer HMS Stanley’s luck runs out when she is sunk at 4.15 AM by U-574 with 3 torpedoes, 435 miles West of Lisbon, Portugal (136 dead). British sloop HMS Stork counterattacks with depth charges, sinking U-574 by ramming 12 minutes later (28 dead, 16 survivors taken prisoner). HMS Stork and corvette HMS Samphire pick up 25 survivors from HMS Stanley. At 6.15 AM, U-108 damages British SS Ruckinge (3 dead, 39 survivors) which is shelled and sunk by HMS Samphire.
Libya. Indian 4th Division, chasing the retreating German and Italian infantry along the coast road to Benghazi, captures Derna too late as most Axis troops have already passed through. Rommel gets some good news, as a shipment of 30 tanks arrives at Benghazi to reinforce Afrika Korps.
Hong Kong. Japanese quickly take control of the Northeast of Hong Kong Island and Allied troops begin retreating to Stanley Peninsula in the Southeast corner. Japanese reach Wong Nai Chung Gap, a narrow pass in the hills in the middle of the Island, where they are stopped by Canadian and Hong Kong troops (600 Japanese casualties). WWI veteran Sergeant Major John Osborn (Winnipeg Grenadiers) will be awarded Canada’s first VC of WWII for tossing back several Japanese grenades before falling on one to save 6 of his comrades. 7 Royal Navy ships (river gunboat HMS Tern, minelayer HMS Redstart, boom vessels HMS Watergate, Barlight & Aldgate, tugs HMS Poet Chaucer & Alliance) and several merchant ships are scuttled in the harbor to prevent capture.
Philippines. Japanese troops continue pushing out of their beachheads on the main island, Luzon. On the Southern island of Mindanao, Japanese come ashore near Davao City at 4 AM, capturing the city and airfield by 3 PM.
Malaya. 25 miles east of Kota Bharu, Dutch submarine HNMS O.20 is depth charged by Japanese destroyers Ayanami and Yugiri from 11 AM and 5.30 PM. Damaged, O.20 surfaces after dark and is shelled by destroyer Uranami. In the ensuing panic, O.20 is scuttled by diving suddenly and Uranami drops more depth charges (7 killed, 32 taken prisoner by Uranami).