* Hong Kong stocks at new five-month highs on renewed
* Technical indicators ring warning sign for Asian stocks
* U.S. dollar bounce runs out of steam on profit taking
* Australian dollar sturdy on yield-seeking bets
By Saikat Chatterjee
HONG KONG, Feb 16 Asian stocks inched to new
19-month highs on Thursday with thanks to an ongoing rally on
Wall Street and bolstered by gains in Chinese stocks while the
dollar came in for a bout of profit-taking after a recent
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.2 percent to its highest since July 2015.
It is up by a tenth this year thanks to more optimistic earnings
expectations and an unwinding of bearish emerging market bets.
European stock markets are set to open steady to slightly
higher according to index futures
Wall Street pushed relentlessly into record-high territory
on Wednesday, with the S&P 500 notching a seven-session winning
Hong Kong stocks climbed to a fresh five-month high and
swelling demand from mainland investors thanks to Beijing's
drive to tackle growing asset price bubbles and the market's
relatively cheap valuations.
Some investors said markets were looking slightly overvalued
from a technical perspective after the bounce in recent weeks.
For example, on a relative strength index (RSI), the MSCI
Asia-ex Japan index was at its most overbought since 2015.
"We are seeing some profit-taking at these levels and unless
there is a big correction, the broader uptrend in the Hong Kong
market seems broadly intact," said Alex Wong, Hong Kong-based
director of Ample Finance Group.
Though latest regional export data confirmed an upswing in
economic activity in Asia was gathering pace, political
uncertainty and anti-globalization rhetoric from the U.S. made
investors cautious of adding big positions.
"In light of these risks, we remain cautiously optimistic on
Asian equities, having set a 12-month target for the MSCI Asia
ex-Japan of 550 - a 7 percent increase from current levels,"
said Tuan Huynh, Asia CIO for Deutsche Bank wealth management
which manages 312 billion euros globally.
Australian stocks gave up early gains and turned
lower on the day after new full-time jobs declined in January, a
setback after a recent run of positive data.
Caution was also evident in the currency markets with the
dollar's recent bounce running out of steam as investors took
profits -- even as fresh data showed a pick up in inflationary
"Retail sales seemed to have been boosted by higher prices
rather than an increase in the real consumption," said Shin
Kadota, senior forex strategist at Barclays. "Investors also
took profit as the dollar was trading high this week."
Fed Chair Janet Yellen, in her second day of economic
testimony before Congress, offered no additional insight on the
timing of the central bank's next rate hike after her comments a
day earlier had hinted at a fairly hawkish policy stance.
Traders may also be leaning towards the Fed delaying a rate
increase beyond its March meeting, with the probability of three
to four rate hikes by the end of year diminishing slightly,
according to the CME FedWatch tool.
The dollar index, which measures the currency against
a trade-weighted basket of six major peers, slipped to 100.92.
It rallied to a one-month high of 101.76 on Wednesday.
The Australian dollar was the sole bright spot in Asian
currency trade, powering to multi-year peaks against the yen,
Swiss franc and euro -- despite a mixed jobs report.
It stood tall versus its U.S. counterpart at $0.7710, having
broken key resistance at 77 cents. It briefly popped to a
three-month high of $0.7732 after data showed a surprise dip in
Australia's unemployment rate.
In commodity markets, oil prices softened as record high
U.S. crude and gasoline inventories fed concerns about a global
glut. U.S. crude was down 0.1 percent at $53.07 a barrel
and Brent softened a tad to $55.74 a barrel
(Additional reporting by Yuzuka Oka in TOKYO; Editing by Shri
Navaratnam and Eric Meijer)