GLOBAL MARKETS-Asian shares step back, Microsoft's brisk earnings boost tech optimism

* Ex-Japan Asia down 0.2%, slim gains seen in Japan, Korea,
Taiwan
* Investors expect Fed to keep dovish stance
* Microsoft shares up 3.7% after strong earnings
* U.S. tech earnings big focus
* European shares seen falling about 0.4%

By Hideyuki Sano and Alwyn Scott
TOKYO/NEW YORK, Jan 27 (Reuters) - Asian equities slipped on
Wednesday as investors looked to the Federal Reserve's guidance
on its monetary policy while futures for U.S. tech shares jumped
after strong earnings from Microsoft.
European stocks are expected to slip a tad, with EuroStoxx
50 futures STXEc1 down 0.3% and FTSE futures FFIc1 shedding
0.4%.
MSCI's gauge of Asian ex-Japan shares .MIAPJ0000PUS
slipped 0.2%, dragged lower by profit-taking in resource shares
.MIAPJMT00PUS as some investors have grown wary of stretched
valuations.
"The global economy appears to be losing momentum a bit and
there is no clear sign yet that COVID-19 infections are slowing
even after vaccinations have started in some places. I expect
shares to get stuck in a range for a while," said Hisashi Iwama,
senior portfolio manager at Asset Management One.
But the tech sector remained a bright spot after Microsoft's
MSFT.N earnings lifted Nasdaq futures 0.5% NQcv1 while
Japan's Nikkei .N225 also rose 0.3%.
Microsoft shares rose 3.7% in extended trading after its
Azure cloud computing services grew 50%, boosting optimism for
other U.S. tech giants, including Apple AAPL.O and Facebook
FB.O , which announce quarterly results later in the day.
"Microsoft's earnings were superb, even compared with strong
market expectations," said Norihiro Fujito, chief investment
strategist at Mitsubishi UFJ Morgan Stanley Securities.
"Those tech firm shares have been in a bit of the doldrums
since August but they are likely to lead the market again, given
their solid outlook," he said.
At their peak in August, the combined market capitalisation
of the top five biggest U.S. tech companies, which also include
Amazon AMZN.O and Alphabet (NASDAQ:GOOGL) GOOG.O , reached 24.6% of the U.S.
blue chip S&P500 index. It stood at 22.7%, still well above 15%
two years ago.
S&P500 futures ESc1 were mostly flat, capped by caution
ahead of the Fed's policy meeting as well as profit-taking on
cyclical shares after stellar gains this month.
The S&P500 is now trading at 22.7 times its expected
earnings, near its September peak of 23.1 times, which was its
most inflated level since the dotcom bubble in 2000.
A surge in shares of video games company Gamestop GME.N
driven by retail investors also raised some concerns that a
rally propelled by loads of stimulus money from governments and
central banks has become extreme. Still, analysts expect the U.S. Federal Reserve to stick to
its dovish tone to help speed the economic recovery when it
concludes its two-day policy meeting on Wednesday. U.S. stimulus talks are also in focus with U.S. Senate
Majority Leader Chuck Schumer saying Democrats will move forward
on President Joe Biden's $1.9 trillion coronavirus relief plan
without Republican support if necessary. Benchmark 10-year notes US10YT=RR were yielding 1.035%,
having hit a three-week low of 1.028% on Tuesday on rising
speculation Biden may have to scale back and possibly delay his
ambitious stimulus plan.
The U.S. dollar was little moved as investors awaited the
Fed's decision for clues on whether they should buy riskier
currencies.
The dollar index =USD flirted with this week's low at
90.204, while the euro EUR= held firm at $1.2161.
Sterling GBP= rose to as high as $1.3753, a level last
seen in May 2018 while the Japanese yen changed hands at 103.70
per dollar JPY= .
The Australian dollar slipped 0.1% to $0.7739 AUD=D4 ,
showing muted response to stronger-than-expected local inflation
data. Oil prices were supported by economic optimism, with U.S.
crude futures CLc1 trading up 0.6% at $52.95 per barrel.
The International Monetary Fund raised its forecast for
global growth in 2021, as widely expected, and many investors
expect the global economic recovery from the pandemic-driven
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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(Editing by Lisa Shumaker and Sam Holmes)