* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Asian markets fall broadly, S&P futures reduce losses
* Apple and Facebook slip despite optimistic results
* Discussion of distressed sales by hedge funds while short positions were pressured
* The dollar gets a safe haven offer while the euro recedes
By Wayne Cole
SYDNEY / NEW YORK, Jan. 28 (Reuters) – Asian stocks fell on Thursday, while the safe haven dollar rose with a sudden sale of Wall Street and delays in coronavirus vaccines served as an excuse to record profits from recent substantial gains.
The broader MSCI index for Asia Pacific stocks outside Japan fell 1.8%, with valuations looking stretched, as the index had risen more than 6% just this month.
Japan’s Nikkei fell 1.3%, its sharpest drop since October, and Chinese blue chips lost 2.4%, with liquidity tightening ahead of the Lunar New Year holiday.
South Korea fell 1.7%, led by losses at Samsung, after reporting profits.
Even tech darlings have not been immune to the downturn in Facebook, despite reporting gains well above expectations. Apple Inc also exceeded forecasts, but its shares lost 3% after the bell.
There was an indication of resilience, as US stock futures reduced initial losses, leaving Eminis for the S&P 500 by 0.2% and NASDAQ futures by 0.3%. EUROSTOXX 50 futures fell 0.3% and FTSE futures 0.7%.
There was no obvious trigger for defeat; on the contrary, many seemed to have rushed out at the same time in a market that had been priced to perfection.
Brokers said highly leveraged investors are making profits where they can to cover losses elsewhere, leading to sharp declines in many overcrowded businesses.
Some pointed a finger at retail investors who forced a massive tightening on hedge funds with short positions in shares like GameStop.
GameStop and several other high-bid stocks later declined in extended commerce after Reddit briefly restricted access to its popular WallStreetBets website.
“The Reddit army should be preparing for stricter rules and regulations soon, which should kill the idea that what happened to GameStop will happen to others,” said Edward Moya, senior market analyst at OANDA.
CHANGES OF HUMOR
The obstinate optimism that vaccines would heal the global economy in just a few months was hampered by the surge in new variants and problems with the distribution of vaccines in the United States and Europe.
Brokers noted that the market also chose to focus more on a pessimistic economic outlook from the Federal Reserve overnight than on its promise of continued support for policy.
“The Fed’s recognition of a slowdown in the pace of recovery and the reliance on vaccine release is nothing new, but it does provide capital investors with a kind of reality check, anticipating the moment of recovery,” said Rodrigo Catril, FX strategist senior at NAB.
The sudden change in mood saw 10-year Treasury yields drop 3 basis points overnight to 1.01%, well below the recent peak of 1.177%.
The safe-haven dollar gained broadly, with its index at 90.753, from a January low of 89.206. The dollar strengthened at 104.33 yen and moved away from the week’s low at 103.54.
The euro fell to $ 1.2090 amid reports that the European Central Bank considered that markets were pricing the risk of further rate cuts.
Commodity-linked currencies were hit by all the economic distress, with Australian and New Zealand dollars falling more than 1% overnight.
The rise in the dollar kept gold prices soft at around $ 1,836 an ounce.
Global demand worries moderate oil prices, despite the huge drop in US oil stocks. US oil dropped 25 cents to $ 52.60 a barrel, while Brent oil futures fell 33 cents to $ 55.48.
(Additional reporting by Alwyn Scott; Editing by Christian Schmollinger and Ana Nicolaci da Costa)