CORRECTED - CORRECTED-GLOBAL MARKETS-Asian stocks fall on swine flu, US bank

                                
  (Corrects para 11 to say the MSCI Asia-Pacific ex Japan hit a
five-year low in November, not March)
                                
 * Stocks fall 2 pct on swine flu fears, Citi/BofA report
                                
 * Drugmakers extend gains, airlines add to losses
                                
 * Yen jumps as risky positions in Aussie, kiwi cut
                                
 By Eric Burroughs
                                
 HONG KONG, April 28 (Reuters) - Asian stocks dropped for a
second day on Tuesday and Japanese shares hit a one-month low,
with investors fretting about the potential economic fallout if
the swine virus outbreak becomes a full-fledged pandemic and
the results of U.S. bank stress tests.
                                
 Futures on the S&P 500 <SPc1> slid 1.5 percent and sparked
further selling across Asia after the Wall Street Journal said
that U.S. regulators were pushing Bank of America <BAC.N> and
Citigroup <C.N> to raise more capital after the initial results
of the stress tests. [ID:nBNG118035]
                                
 European stock futures were down between 1.4 percent and
1.8 percent before the start of trade.
                                
 More countries have reported cases of the flu, and some
such as Australia and South Korea were testing for the virus.
The World Health Organization raised its alert level to be a
step closer to declaring the first flu pandemic in 40 years.
                                
 But so far the deaths have not spread beyond Mexico, where
the outbreak began and 149 people have been killed. [nFLU]
                                
 Companies such as drugmakers and producers of face masks
got a boost on an expected increase in demand, while airlines
extended losses on worries the swine flu will cause a sharp
reduction in travel around the world.
                                
 Japan's Chugai Pharmaceutical <4519.T>, maker of influenza
drug Tamiflu, rose 1.9 percent. Hong Kong's Cathay Pacific
Airways <0293.HK> dropped 3 percent.
                                
 Market players cut back on holdings of riskier
higher-yielding currencies and commodities for a second day,
taking profits on winning bets since the beginning of March on
hopes a global economic recovery was taking root.
                                
 "Active trade is limited as the market is trying to grasp
how much swine flu could impact the global economy. We had
finally begun to see a bottom for the global economy and that
has been now ruined by pigs," said Tsuyoshi Segawa, equity
strategist at Shinko Securities.
                                
 The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> fell 2.2 percent after the S&P 500 <.SPX> shed
1.1 percent on Monday.
                                
 The MSCI benchmark for Asia is still up 28 percent from its
lows in early March, which took it near a five-year low struck
last November.
                                
 Japan's Nikkei average <.N225> shed 2.7 percent, with
disappointing earnings from shippers like Mitsui OSK Lines
<9104.T> and steelmakers like Nippon Steel <5401.T> slamming
the market.
                                
 AUSSIE AND KIWI EXTEND SLIDE
                                
 The Australian and New Zealand dollars -- still among the
highest-yielding of major currencies -- hit one-month lows
against the yen as investors cut back on traditional plays
favouring carry trades that were in vogue as stocks rallied.
                                
 The Aussie was down 1.8 percent against the yen at 67.30
yen <AUDJPY=R> and shed 1 percent against the dollar to $0.7021
<AUD=D4>. The kiwi shed 2.5 percent against the yen <NZDJPY=R>.
                                
 Between early February and mid April, the Aussie had surged
more than 30 percent against the yen as carry trades -- using
low-yielding currencies as a cheap source of funds to buy
higher-yielding currencies -- came back into favour.
                                
 The Aussie's correlation has been strengthening against key
stock markets over the past few weeks, suggesting that
investors have been cutting positions at the same time across
markets.
                                
 The dollar was steady after posting gains the previous day
as investors park funds in the U.S. currency as a haven while
shedding holdings of riskier assets.
                                
 The dollar index, a gauge of its performance against six
major currencies, was flat at 85.677 <.DXY> after having jumped
1.1 percent on Monday -- the biggest daily rise in a month.
                                
 The dollar's gains pushed gold prices lower and triggered
stop-loss selling of bullion, traders said. Gold was down
$10.20 an ounce at $896.30 <XAU=>. U.S. crude oil <CLc1> shed
89 cents to $49.25.
                                
 Government bonds jumped as equity market losses
accelerated.
                                
 Japanese government bond futures <2JGBv1> rose 0.63 point,
the biggest daily gain in a month and boosted in part by market
players covering short positions.
                                
 Safe-haven Treasuries gained, with benchmark 10-year notes
<US10YT=RR> edging up 5/32 in price to yield 2.893 percent, off
2 basis points from late U.S. trade.
 (Additional reporting by Aiko Hayashi in Tokyo; Editing by
Neil Fullick)