(Corrects name of investor in 6th graf)
* Japan, Australia lead regional stock market losses
* Investors find U.S. stocks the most overvalued - BofA-ML
* Oil drops on supply glut concerns
By Saikat Chatterjee
HONG KONG, March 22 Asian stocks posted their
biggest drop in two weeks on Wednesday as growing doubts about
Donald Trump's economic growth agenda prompted investors to dump
risky assets and to rush to safe havens such as gold and
Equity markets across the region were a sea of red in
opening trades and the Australian dollar nursed heavy
losses as funds took profits into a two-week long rally.
"Asian stocks have had a good run so this is a good excuse
to take some money off the table though there is plenty of cash
waiting on the sidelines to be invested if the selloff
intensifies," said Alex Wong, a fund manager at Ample Capital
Ltd. in Hong Kong, with about $130 million under management.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 1.3 percent in early trade, its biggest
intraday percentage fall since March 9. In the previous session,
it hit its highest level since June 2015.
Japan and Australian stocks led regional
Despite the early tumble, some investors such as Sherwood
Zhang at Matthews Asia, part of a team that manages $26 billion
in global assets, was optimistic about the outlook for Hong Kong
stocks citing relatively reasonable valuations.
Both the S&P 500 and the Dow Jones Industrial Average
lost more than one percent on Tuesday in frantic trading,
their biggest one day slide since before Donald Trump's election
victory in November. U.S. futures were down 0.3 percent
With valuations stretched -- U.S. stocks are trading at the
upper end of their historical valuation ranges -- investors see
the Trump administration's struggles to push through the
healthcare overhaul as a sign he may also face setbacks
delivering promised corporate tax cuts.
Expectations of those cuts have been a major driver behind
the 10-percent surge in the S&P 500 since Trump's election.
In a BofA Merrill Lynch survey conducted last week, 34
percent of investors found equities to be most overvalued of all
asset classes, the highest proportion in 17 years, with U.S.
stocks identified as the most expensive.
"Investor positioning argues for a risk rally pause in
March/April, with allocation to equities at a two-year high and
bond allocation at a three-year low," said Michael Hartnett,
chief investment strategist at the bank.
"Policy is the key catalyst for the Icarus trade to fly
higher in the coming months."
With investor mood decidedly risk-off, the Japanese yen
scored some chunky gains against the U.S. dollar, rising
to a four-month high of 111.63. The greenback fell below a key
level of 100 against a trade-weighted basket of its
Bonds gained with yields on two-year U.S. debt
falling to 1.27 percent in overnight trades, retreating further
from a 7-1/2 year high of 1.38 percent hit last Wednesday when
the U.S. Federal Reserve raised interest rates.
Gold was on track to extend its overnight strong
performance with the precious commodity perched comfortably at a
two-week high of $1,248 per ounce.
Commodities other than gold, however, have had a rough
outing with copper and iron ore prices down by
more than one percent each.
Oil prices declined as concerns about new supply
overshadowed the latest talk by OPEC that it was looking to
extend output cuts.
U.S. West Texas Intermediate crude extended overnight
losses to fall to fresh four-month lows at $48.15 a barrel.
(Editing by Sam Holmes)