GLOBAL MARKETS-Asia stocks follow Wall St tumble on valuation worries

* Tech stocks take surprise tumbles after strong results
* Bonds, dollar stronger, but no sign of urgent buying
* Fed's steady stance shifts focus to fiscal stimulus

By Alwyn Scott
NEW YORK, Jan 27 (Reuters) - Asian stocks skidded on
Thursday following a sharp Wall Street decline amid deepening
concerns about stretched valuations in equities markets, while
the dollar and bonds strengthened.
In early Asian trade, Australia's S&P/ASX 200 benchmark
.AXJO lost 1.99%, Japan's Nikkei NKc1 fell 2.28% and Hong
Kong's Hang Seng index futures .HIS HSIc1 lost 0.51%. S&P
futures .ESc1 pulled back 1%.
Adding to the market worries was the outcome of Federal
Reserve's policy meeting. While the Fed kept settings unchanged
as expected, policymakers flagged a concerning slowdown in the
pace of the economic recovery. On Wall Street, the benchmark S&P 500 index .SPX fell
nearly 2.57%. The Dow Jones Industrial Average .DJI fell 2.05%
and the Nasdaq Composite .IXIC dropped 2.61%.
Boeing Co BA.N dragged on the Dow by falling 3.97% on a
$6.5 billion charge for its delayed 777X jetliner and
crash-plagued 737 MAX. Michael McCarthy, chief market strategist at CMC Markets in
Sydney, said the wider stock selloff was surprising, given
strong fourth-quarter results from tech giants.
"A little bit of a sell-the-fact response," McCarthy said,
noting stock valuations are at toppy levels. "It might not have
everything to do with the Fed."
Noting there was no urgency in dollar or bond-buying, he
said: "Maybe what we need is a good old-fashioned panic" to cool
valuations.
The S&P and Dow are down 0.14% and 0.99%, respectively, so
far this year.
U.S. Treasury yields remained lower, and the dollar index
=USD rose 0.559%, with the euro EUR= down 0.07% to $1.21.
Upbeat U.S. corporate earnings were not enough to pull the
benchmarks higher. Microsoft Corp MSFT.O initially rose but
erased most of the gains to end up 0.25%. Facebook (NASDAQ:FB) shares edged up 0.68% while Tesla fell 2.10% after
the close. Apple AAPL.O shares also dipped in extended trade
after its results. These heavyweights have come back into favor as investors
dumped economy-linked banks, energy and small-cap stocks.
On the macro level, the Fed's steady stance shifts the
spotlight to how soon and how much fiscal stimulus the U.S.
Congress can agree to muster to support the economy.
"The focus is firmly on the fiscal side of the equation
now," Rick Rieder, BlackRock's chief investment officer of
global fixed income, said in a note.
Stimulus checks and extended unemployment insurance have
been important to the U.S. recovery and are "far more targeted
and effective in combating a crisis...than 'blunt' monetary
policy tools," he added.
Though the U.S. vaccination program may help the economy
reopen and rebound more fully later this year, for now Fed
officials signaled they see it in a deep hole, with high levels
of joblessness, ailing small businesses, and a recent surge in
COVID-19 infections.
The pan-European STOXX 600 index .STOXX lost 1.16% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
2.04%.
The Japanese yen weakened 0.01% versus the greenback at
104.12 per dollar.

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