* Hong Kong stocks at new five-month highs on renewed inflows
* Technical indicators ring warning sign for Asian stocks
* U.S. dollar bounce runs out of steam on profit taking
* Australian dollar sturdy on yield-seeking bets
By Saikat Chatterjee
HONG KONG, Feb 16 (Reuters) - Asian stocks inched to new 19-month highs on Thursday with thanks to an ongoing rally on Wall Street and bolstered by gains in Chinese stocks while the dollar came in for a bout of profit-taking after a recent bounce.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent to its highest since July 2015. It is up by a tenth this year thanks to more optimistic earnings expectations and an unwinding of bearish emerging market bets.
European stock markets are set to open steady to slightly higher according to index futures
Wall Street pushed relentlessly into record-high territory on Wednesday, with the S&P 500 notching a seven-session winning streak.
Hong Kong stocks climbed to a fresh five-month high and swelling demand from mainland investors thanks to Beijing's drive to tackle growing asset price bubbles and the market's relatively cheap valuations.
Some investors said markets were looking slightly overvalued from a technical perspective after the bounce in recent weeks. For example, on a relative strength index (RSI), the MSCI Asia-ex Japan index was at its most overbought since 2015.
"We are seeing some profit-taking at these levels and unless there is a big correction, the broader uptrend in the Hong Kong market seems broadly intact," said Alex Wong, Hong Kong-based director of Ample Finance Group.
Though latest regional export data confirmed an upswing in economic activity in Asia was gathering pace, political uncertainty and anti-globalization rhetoric from the U.S. made investors cautious of adding big positions.
"In light of these risks, we remain cautiously optimistic on Asian equities, having set a 12-month target for the MSCI Asia ex-Japan of 550 – a 7 percent increase from current levels," said Tuan Huynh, Asia CIO for Deutsche Bank wealth management which manages 312 billion euros globally.
Australian stocks gave up early gains and turned lower on the day after new full-time jobs declined in January, a setback after a recent run of positive data.
Caution was also evident in the currency markets with the dollar's recent bounce running out of steam as investors took profits -- even as fresh data showed a pick up in inflationary pressures.
"Retail sales seemed to have been boosted by higher prices rather than an increase in the real consumption," said Shin Kadota, senior forex strategist at Barclays. "Investors also took profit as the dollar was trading high this week."
Fed Chair Janet Yellen, in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank's next rate hike after her comments a day earlier had hinted at a fairly hawkish policy stance.
Traders may also be leaning towards the Fed delaying a rate increase beyond its March meeting, with the probability of three to four rate hikes by the end of year diminishing slightly, according to the CME FedWatch tool.
The dollar index, which measures the currency against a trade-weighted basket of six major peers, slipped to 100.92. It rallied to a one-month high of 101.76 on Wednesday.
The Australian dollar was the sole bright spot in Asian currency trade, powering to multi-year peaks against the yen, Swiss franc and euro -- despite a mixed jobs report.
It stood tall versus its U.S. counterpart at $0.7710, having broken key resistance at 77 cents. It briefly popped to a three-month high of $0.7732 after data showed a surprise dip in Australia's unemployment rate.
In commodity markets, oil prices softened as record high U.S. crude and gasoline inventories fed concerns about a global glut. U.S. crude was down 0.1 percent at $53.07 a barrel and Brent softened a tad to $55.74 a barrel (Additional reporting by Yuzuka Oka in TOKYO; Editing by Shri Navaratnam and Eric Meijer)