* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan swings higher, Nikkei rebounds
* S&P 500 futures stable despite doubts about vaccine introduction
* The crowd in retail is looking at silver and jumping 6m high
* Dollar backed by cautious sentiment, bonds prepared for offer
By Wayne Cole
SYDNEY, February 1 (Reuters). Asian stocks rallied Monday, and US stock futures recovered early losses as newly empowered retail investors turned their attention to precious metals and promised a break for some hard-hit hedge funds.
The broadest MSCI index for stocks in the Asia-Pacific region outside of Japan rose 1.4% after four consecutive losses.
Japan’s Nikkei rose 1.2% after losing almost 2% on Friday, while Chinese blue chips rose 0.5% as the country’s central bank injected more money into the money markets.
Futures for the S&P 500 rose 0.3% after falling up to 1% in the early stages, while NASDAQ futures rose 0.1%. EUROSTOXX 50 futures rose by 0.6% and FTSE futures by 0.2%.
Traders noted a shift in the headline-grabbing battle between retail investors and Wall Street that resulted in hedge funds shedding last week amid wild swings in GameStop Corp. most stocks traded in a decade.
There was now talk of silver being the new target for the retail industry as the metal rose 6% to a six month high, potentially limiting the need for distressed sales by equity funds.
Analysts warned that this entertaining episode was really a sideline compared to signs of a loss of economic momentum in the US and Europe as coronavirus lockdowns bite.
In fact, two polls from China showed that factory activity slowed in January as restrictions took a toll in some regions.
News of vaccine rollouts hasn’t been positive either, especially given doubts as to whether they will work on new strains of COVID.
“It is these considerations, not what happens daily to a video game retailer, that weighs on risk,” said John Briggs, global strategy director for NatWest Markets. “Much of the market valuations, especially risk, are based on the fact that we can see a light at the end of the COVID tunnel.”
Doubts have also emerged about the future of President Joe Biden’s $ 1.9 trillion aid package. 10 Republican senators push for $ 600 billion plan.
The turmoil in stocks only caused a brief ripple in bonds, with government bond yields actually rising late last week, possibly due to the tidal wave of borrowing.
A record $ 1.11 trillion in gross government bond issuance is forecast for this quarter, up from $ 685 billion in the same period last year.
On Monday, US 10-year yields had risen to 1.08%, nearing their latest 10-month high of 1.187%.
Higher yields combined with more cautious market sentiment have kept the safe haven dollar stable above its recent lows. The dollar index stood at 90.535 after rebounding from a low of 89.206 in early January.
The euro was idle at $ 1.2129, well below its recent high of $ 1.2349, while the dollar remained firm at 104.70 yen.
Gold followed silver higher to $ 1,862 an ounce but repeatedly paused at resistance around $ 1,875.
Oil also tracked gains in other commodities, with US crude rising 21 cents to $ 52.42 a barrel. Brent crude oil futures rose 33 cents to $ 55.37.
(Reporting by Wayne Cole; Editing by Shri Navaratnam, Richard Pullin, and Gerry Doyle)