GLOBAL MARKETS-Asian stocks hit by profit taking amid concerns about stretched rally

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* China shares falter on return from Lunar New Year
* Tech shares and cyclicals lead markets lower
* Treasury yields pull back after sell-off
* Sentiment still positive on recovery hopes

By Stanley White and Pete Schroeder
TOKYO/WASHINGTON,Feb 18 (Reuters) - Asian stocks fell on
Thursday as investors locked in profits on sectors that have
outperformed recently in a sign of growing caution about the
recent rally in global equities.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.42% but was still close to an all-time
high. Chinese markets dipped on their first day of trade after
the Lunar New Year break.
In signs global sentiment was still buoyant, Euro Stoxx 50
futures STXEc1 were up 0.22%, German DAX futures FDXc1 were
up 0.15% at 13,917, and FTSE futures FFIc1 rose 0.3%.
Strong U.S. retail sales, new signs the Federal Reserve will
maintain its accommodative stance, and an ongoing push for
further U.S. stimulus have bolstered economic optimism, but some
analysts remain cautious because new strains of the coronavirus
continue to emerge.
"With an even larger stimulus package likely to be passed by
Congress before the end of March, the U.S. economic recovery
could gain more momentum in 2021," wrote Commonwealth Bank of
Australia currency analyst Carol Kong.
"Despite the recent positive vaccine developments, the
global economic outlook remains uncertain partly because of the
spreading virus variants."
Australian stocks .AXJO rose 0.01%, while Japan's Nikkei
.N225 fell 0.14%.
E-mini futures for the S&P 500 EScv1 fell 0.13%.
Yields on two-year Treasuries US2YT=RR hit a record low
and the 10-year yield US10YT=RR extended a pullback from a
one-year high as a bond market sell-off started to fade.
On Wall Street, technology stocks fell, driving down the
Nasdaq while other companies rose on broader economic optimism.
The Dow Jones Industrial Average .DJI rose 0.29%, while
the S&P 500 .SPX lost 0.03% and the Nasdaq Composite .IXIC
dropped 0.58%. Technology shares in Asia took their lead from the Nasdaq
and fell. Investors also sold shares in the energy, materials,
and consumer goods sectors that have recently risen sharply
because they are expected to benefit from an economic rebound.
Shares in China, which traded for the first time since the
week-long Lunar New Year holiday, started brightly but later
fell after the Peoples' Bank of China drained 260 billion yuan
($40.31 billion) from money markets, raising concerns about
tightening liquidity. The MSCI's global stock index .MIWD00000PUS fell 0.1% but
was still near a record high.
In contrast to concerns about tightening in China, minutes
from the January Fed meeting showed policymakers willing to push
further accommodation to boost the pandemic-scarred U.S.
economy. Hopes for a stronger U.S. economy supported the greenback.
The dollar index =USD , a measure of the currency's strength
against six other major currencies, was steady, holding onto a
0.25% gain from the previous session. The risk-on appetite was apparent in bitcoin BTC=BTSP ,
which continued its upward march to exceed $52,000 amid signs it
may be gaining more mainstream acceptance. Cryptocurrency
ethereum ETH=BTSP also rose more than 2% to new record high of
$1,900. The two-year U.S. Treasury yield briefly touched a record
low of 0.1049%. Benchmark 10-year yields eased slightly to
1.2771%, pulling away from the highest level since Feb. 27, 2020
as some investors judged that recent selling of fixed income had
gone too far.
An ongoing deep freeze in Texas continued to drive up oil
prices, as the unusually cold weather hampered output at the
largest U.S. crude producing state. Brent crude LCOc1 gained
1.38% to $65.23 a barrel, while U.S. West Texas Intermediate
(WTI) crude .CLc1 rose 1.08% to $61.80 a barrel, both reaching
levels not seen since January last year. Spot gold XAU= edged up 0.41% to $1,783.61 per ounce. U.S.
gold futures GCv1 rose 0.28% to $1,776.10 per ounce.
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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 Richard Pullin, Ana Nicolaci da Costa and Sam
Holmes)