* Nikkei again bounces from strong support, other markets
* China tech stocks spooked by losses in U.S. tech sector
* Euro weighed by speculation of ECB action, low yields
By Wayne Cole
SYDNEY, March 27 Asian markets were in skittish
mood on Thursday following a soft finish on Wall Street and
amid simmering tensions over Ukraine, while Chinese tech stocks
took a tumble in sympathy with their U.S. counterparts.
Trading was thin and choppy with the month and quarter-end
fast approaching. Tokyo stocks initially skidded as investors
counted down to a rise in sales tax that is expected to chill
consumer spending and test the market's faith in Abenomics.
But the Nikkei met solid support near 14,200, as it
has for weeks now, and rebounded to be up 0.6 percent.
Some blamed Wall Street's slip on news the United States and
the European Union had agreed to work together to prepare
possible tougher economic sanctions in response to Russia's
actions in Ukraine.
The Dow ended down 0.60 percent, while the S&P 500
fell 0.70 percent. The technology-heavy Nasdaq
shed 1.43 percent to a low not seen in six weeks.
The losses were led by Facebook off almost 7 percent
after announcing a $2 billion takeover of Oculus VR Inc, a maker
of virtual-reality glasses for gaming.
Gaming company King Digital Entertainment Plc also
fell as much as 16 percent in its U.S. debut on Wednesday.
The losses spooked the Chinese tech sector where index
heavyweight Tencent Holdings Ltd shed 6 percent to its
lowest level in six weeks.
The Hang Seng lost 0.5 percent and Shanghai
0.75 percent. MSCI's broadest index of Asia-Pacific shares
outside Japan was little changed, much like most
other bourses across the region.
Shares in Citigroup Inc fell after hours when the
Federal Reserve rejected its plans to buy back $6.4 billion of
stock and boost its dividends, citing deficiencies in the bank's
ability to withstand stressful situations.
Others blocked by the Fed in their plans for higher
dividends or share buy backs included the U.S. units of HSBC
, RBS and Santander.
In debt markets, the talk was all about Wednesday's auction
of new U.S. five-year notes that drew such stellar
demand from investors that it left dealers with the lowest share
of an offer on record.
That drove five-year yields down a sharp 7 basis points to
1.74 percent, unwinding some of the rise seen since Federal
Reserve Chair Janet Yellen last week spooked markets with talk
of rate hikes next year.
Yields in Europe have been falling even more as policymakers
there hint at radical stimulus measures. Some of the European
Central Bank's most conservative policymakers have said the bank
could adopt more unconventional measures to tackle a surging
euro and ward off deflation.
"It seems the ECB is concerned about disinflation a bit more
than the market had been led to believe. The ECB seems to be
trying to adjust market expectations as the euro has gained,"
said Shin Kadota, chief FX strategist at Barclays.
As a result the premium that U.S. two-year notes offer over
German debt hit a 15-month high on Wednesday, making the euro
relatively less attractive against the dollar.
That saw the single currency ease to $1.3783, well
off the week's peak of $1.3875. The biggest loss came against
the Australian dollar where the euro sank 0.9 percent to a
four-month trough at A$1.4910.
The U.S. dollar was steady against a basket of major
currencies at 80.025, and regained early losses on the
yen to stand at 102.15.
In commodities, spot gold was soggy at $1,302.93 an
ounce after plumbing a 5-week low of $1,298.29 on Wednesday.
U.S. crude oil was holding at $100.31 a barrel having
gained a dollar on Wednesday as inventories at the future's
delivery point dropped for the eighth straight week. Brent for
May delivery was off 8 cents at $106.95 a barrel.
(Editing by Shri Navaratnam and Eric Meijer)