GLOBAL MARKETS-Asian shares sink on fading global recovery hopes

* MSCI Asia ex-Japan -1.93%; Nikkei -1.11%

* European futures point to sharply lower opens

* U.S. Fed officials call for more fiscal support

* Gold touches new two-month lows on strong greenback

SHANGHAI/NEW YORK, Sept 24 (Reuters) - Asian shares dropped on Thursday, set for their worst day in two months, as warnings from U.S. Federal Reserve officials underscored investor worries over the resilience of an economic recovery from the coronavirus pandemic.

The battering was set to continue in Europe, where pan-region Euro Stoxx 50 futures sank 1.55%, German DAX futures lost 1.48%, and FTSE futures fell 1.24% in early trades.

U.S. Federal Reserve Vice Chair Richard Clarida said on Wednesday that the U.S. economy remains in a “deep hole” of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers “are not even going to begin thinking” about raising interest rates until inflation hits 2%.

Cleveland Federal Reserve Bank President Loretta Mester echoed Clarida, saying that the U.S. remains in a “deep hole, regardless of the comeback we’ve seen.”

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.93% in the afternoon session on broad losses across the region, putting it on track for its biggest daily drop since July 16.

The MSCI index is also set for its biggest weekly drop since March, down more than 4% so far this week.

Chinese blue-chips dropped 1.6%, Hong Kong’s Hang Seng fell 1.7%, Seoul’s KOSPI sank 2.59% and Australian shares fell 0.81%.

Japan’s Nikkei declined 1.11%.

“Have we overpriced the rebound in the economy? After the stern warning from Clarida, I say we have,” said Stephen Innes, chief global markets strategist at AXI.

“I think the market was interpreting a bounce from the bottom as a cyclical recovery, but I don’t think we’re there yet. I still think there’s a lot of blood on the street, especially on Main Street.”

U.S. stocks fell on Wednesday after data showed business activity slowed in September, with gains at factories more than offset by a retreat at services industries.

Investors now await weekly data due later on Thursday, which is expected to show U.S. jobless claims fell slightly but remained elevated, indicating the world’s largest economy is far from recovering.

While Clarida and other Fed officials have called for more fiscal assistance in boosting the economy, analysts say immediate support is unlikely with the U.S. Congress locked in a stalemate.

Additionally, a second wave of coronavirus infections in Europe threatened the economic recovery in that region pushing equities lower and propping up the safe-haven dollar.

On Wednesday, the Dow Jones Industrial Average fell 1.92%, the S&P 500 lost 2.37% and the Nasdaq Composite dropped 3.02%.

In the currency market, the dollar touched a new two-month high. The dollar index, which measures the greenback against a basket of peers hovered near those highs at 94.409 on Thursday afternoon, but edged down against the yen to 105.31.

The euro ticked down to $1.1657.

“A stronger USD remains a significant headwind for commodity markets, with investor appetite waning,” ANZ analysts said in a note.

Spot gold, which hit a two-month low early in the Asian day on the stronger greenback, was down 0.68% at $1,850.91 per ounce.

Oil prices fell amid uncertainty about demand because of pandemic-related travel restrictions.

Brent crude dropped 0.53% to $41.55 a barrel and U.S. West Texas Intermediate crude was 0.73% lower at $39.64 a barrel.

U.S. Treasury yields fell, with the 10-year yielding 0.6741% from 0.676% on Wednesday, and the 30-year yield at 1.4142% from 1.425%.

Reporting by Andrew Galbraith in Shanghai and Imani Moise in New York; Editing by Sam Holmes and Christian Schmollinger