GLOBAL MARKETS-Corporate results loom, weighing on Asia stocks

                                
 * Stock markets brace for earnings, await sales outlooks
                                
 * Some Asia earnings look better but getting revised lower
                                
 * Market volatility contained despite equities selloff
                                
 * U.S. dollar, Treasuries sought as stocks sink
                                
 * Australia yield curve flattens slightly
                                
 By Kevin Plumberg
                                
 HONG KONG, April 8 (Reuters) - Asian stocks slid for a
second day on Wednesday while the U.S. dollar climbed, with
investors fleeing to the sidelines to await companies' business
outlooks as what is expected to be a grim results season
begins.
                                
 Shares of banks, automakers and technology companies were
the main targets of selling, after they led a sharp rally in
the last month on the back of budding optimism that policymaker
stimulus efforts would eventually filter down to the global
economy.
                                
 Those hopes are being tempered by the brute reality that
earnings for the U.S. S&P 500 companies are expected to tumble
37 percent in the first quarter, the seventh consecutive
declining quarter, according to Thomson Reuters.
                                
 Some Asian companies were expected to fare better this year
than many of their counterparts in other regions. For example,
U.S. earnings this year were forecast to shrink 4 percent
versus 1 percent in Hong Kong and 10 percent growth in South
Korea, according to global estimates tracker IBES.
                                
 Still, the overarching trend of downward earnings
revisions
 was still firmly in place.
                                
 "I think round one of the rally may be over," said
Katsuhiko Kodama, a senior strategist at Toyo Securities in
Japan.
                                
 "We're also heading into the earnings season, and while it
has been predicted to be bad and you can say things are
factored in, it's different when you actually have those
figures before your eyes."
                                
 Japan's Nikkei share average fell 2 percent, led by Canon
Inc <7751.T> and top bank Mitsubishi UFJ Financial Group
<8306.T>. The index on Tuesday closed roughly 25 percent above
its March 10 bear market low.
                                
 The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> was down 2 percent, having been repelled by a
major obstacle on technical charts for the third time on
Monday.
                                
 A 4 percent drop in shares of global lender HSBC <0005.HK>
was the biggest drag on Hong Kong's Hang Seng index <.HSI>,
which led the region with a 2.2 percent decline on the day.
                                
 S&P 500 futures <SPc1> were down 1.1 percent, pointing to a
lower open, after aluminium producer Alcoa Inc <AA.N> kicked
off the U.S. earnings season by posting a second straight
quarterly decline. [ID:nN07485652]
                                
 VOLATILITY UNDER CONTROL
                                
 Despite the shakeout in bullish positions in equities,
global financial markets appeared to be at an inflection point,
with volatility remaining contained and the pace of economic
decline appearing to slow across the region.
                                
 The Chicago Board Options Exchange's volatility index, or
VIX <.VIX>, closed below its 200-day moving average for a third
day. The 20-day moving average of the VIX was on the verge of
dropping below the 200-day, signalling a shift to a downtrend.
                                
 For now investors have sought cover in the U.S. dollar and
yen until some corporate earnings visibility returns.
                                
 The euro fell 0.4 percent to $1.3215 <EUR=> and dipped 0.3
percent to 132.98 yen <EURJPY=R>, after touching 137.42 yen on
Monday, its highest since late October.
                                
 The dollar rose 0.2 percent to 100.66 yen <JPY=> after
rising to a nearly six-month high of 101.45 yen on Monday.
                                
 "The currency market moved back to risk aversion after
optimism had gone a bit too far," said Yoshihisa Kanzaki, a
currency dealer at Shinkin Central Bank.
                                
 U.S. light crude fell about a dollar or 2 percent toward
$48 a barrel on Wednesday <CLc1>, adding to Tuesday's 3.7
percent loss after weekly data showed U.S. crude inventories up
far more than expected and declining equities dented sentiment.
                                
 Falling stocks pushed up Japanese government bond futures
<2JGBv1> but caution before a five-year auction later in the
day capped gains. The June 10-year futures contract was up 0.07
point.
                                
 Australian bonds resumed their downtrend, unwinding bets on
a steepening yield curve, after the Reserve Bank of Australia
cut rates to a record low on Tuesday. Some investors believe
that the end of the easing cycle is approaching.
                                
 U.S. Treasuries extended gains from overnight as investors
sought a short-term refuge. The yield on the benchmark 10-year
yield <US10YT=RR> dipped to 2.88 percent from 2.90 percent on
Tuesday in New York.