GLOBAL MARKETS-Asian stocks fall as investors cut recovery bets

* Stocks fall on profit taking after weak U.S. consumer data

* Oil and copper prices weaken on economic pessimism

* China stocks at lowest since mid-June

* Australian and New Zealand dollars hurt by risk aversion

By Umesh Desai

HONG KONG, Aug 17 (Reuters) - Asian stocks tumbled to their lowest level in over two weeks on Monday as investors raked in profits amid gloomy U.S. consumer data and a growing belief that market valuations had overtaken economic fundamentals.

European shares tracked the slide in Asia, with the FTSEurofirst 300 <.FTEU3> down 1.1 percent.

U.S. S&P stock futures fell 1.5 percent, indicating a weaker opening for Wall Street, which was sent reeling on Friday by data showing U.S. consumer confidence fell more than expected in early August, dropping to its lowest level since March. [.N]

Oil and metals prices also fell as appetite for riskier assets cooled and investors sought the safety of U.S. Treasuries.

The sell-off in Asian stocks was broad-based with financials, industrials and materials providing the biggest drag on the MSCI index of Asia Pacific shares traded outside Japan <.MIAPJ0000PUS>. The index fell 3.3 percent to its lowest levels so far this month.

Still, the index is up 73 percent since March 9, when the global equity rally began on hopes the worst of the economic slump was over and that the growing signs of recovery would lead to a brighter outlook for corporate earnings.

"This is a reality check. The markets had run up so quickly, discounting a scenario which is perhaps never going to materialise," said Bratin Sanyal, Hong Kong-based ING head of Asian Equity Investments, referring to hopes for a quick recovery.

Highlighting investor fears that equity markets had grown overheated, China stocks <.SSEC> slumped 5.8 percent to their lowest since mid-June, after dropping 6.6 percent last week. Investors continued to worried about additional share supplies from IPOs, adding to fears that authorities will tighten monetary policy and clamp down on bank lending.

Even after data released on Monday showed Japan's economy became the third G7 country after Germany and France to pull out of recession, investors continued to shun growth-linked currencies such as the Australian and New Zealand dollars.

Japan's Nikkei share average <.N225> was caught in the fierce downdraft, slumping 3.1 percent to a two-week low even as data showed the economy had pulled out of its longest recession since World War Two. [.T]

Japan's GDP grew 0.9 percent in the second quarter, but investors fear the world's No.2 economy could lose steam when a temporary boost from government stimulus peters out.

The growing pessimism prompted some investors to turn to safe-haven government debt, pushing September 10-year JGB futures <2JGBv1> to a one-month high.

"Today's data was driven by stimulus steps in Japan and overseas, so Japan's economy is far from self-sustaining growth," said Kyohei Morita, chief economist for Japan at Barclays Capital.

RALLIES FIZZLE

Commodity bulls also retreated, ending a sizzling rally in oil and copper prices that was largely fuelled by optimism the global economy had turned a corner.

Oil prices extended steep losses seen on Friday, when they suffered their biggest one-day fall since end-July, and traded well below $67 a barrel. Shanghai copper futures were limit down, ending last week's four-day rally.

Oil had rallied for four straight weeks, while copper prices had their biggest weekly rise in over two months last Friday.

Monday's wave of risk aversion also hurt demand for higher yielding currencies like the Australian and New Zealand dollars, which are closely linked to commodity prices.

The Aussie was well off an 11-month high of $0.8479 struck on Friday, falling to a low of $0.8186, while the kiwi dipped to the day's trough of $0.6682.

The dollar fell against the yen but its losses were mild after a half-yen fall on Friday, and it was up on the day against the euro.

The greenback dropped 0.3 percent to 94.60 yen , close to its lowest for the month but still within a broad range of 91.70-98.00 seen since mid-June.

The euro shed 0.4 percent to $1.4148 , retreating further from this month's 2009 peak of $1.4448.

U.S. Treasuries extended last week's gains on the flight to safety, with the 10-year Treasury notes yielding 4 basis points (bps) lower at 3.53 percent as enthusiasm about the economic recovery waned and confidence grew the Federal Reserve will keep interest rates near zero and maintain its quantitative easing policy for a long time. (Editing by Kim Coghill)