* Asian shares at 2-1/2 week low, Wall Street falls overnight
* Markets now expect 25 bp Fed cut in July, down from 50 bp
* Tech companies track Apple's drop; Powell's testimony coming
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano and Noah Sin
TOKYO/HONG KONG, July 9 (Reuters) - Asian stocks fell to their lowest levels in two and a half weeks on Tuesday as hopes dwindled for a hefty interest rate cut by the U.S. Federal Reserve at the end of the month, while technology companies were pulled lower by Apple Inc's AAPL.O overnight slump.
Investors have rushed to scale back Fed rate cut expectations following unexpectedly strong gains in U.S. jobs for June, with U.S. stock markets falling for a second straight day.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.5% to its lowest since June 20.
Japan's Nikkei .N225 slipped 0.1%.
In China, the Shanghai Composite .SSEC and the blue-chip CSI300 .CSI300 were both 0.6% lower, while Hong Kong's Hang Seng .HSI fell 0.8%.
Australian stocks .AXJO fell 0.4% and the Korean market .KS11 was 0.3% lower.
On Wall Street, the S&P 500 .SPX lost 0.48% while the Nasdaq Composite .IXIC dropped 0.78%, led by fall in Apple after a brokerage downgraded the stock to "sell". .N
Apple's suppliers in Japan, such as Murata Manufacturing 6981.T and Taiyo Yuden 6976.T , fell 2.1% to 3.4%. In Greater China, suppliers from Hon Hai 2317.TW to AAC Tech 2018.HK lost between 1.3% and 2.8%. market futures 0#FF: are still fully pricing in a 25 basis point (bps) cut at the Fed's next policy meeting on July 30-31, but have almost priced out a larger 50 bps reduction. FEDWATCH
"The headline payrolls figures was pretty strong but wages were tepid, so on the whole a 25 basis-point cut would be justified as an pre-emptive move and I think the current market pricing is fair," said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management.
Global equities will likely remain under pressure after last month's outperformance, Pictet Wealth Management said in a memo on Tuesday.
"After a strong rally in June that more than erased the May drawdown, valuations look demanding, underpinning our underweight stance," the firm said. "We expect (emerging market) equities to perform sideways in the coming weeks, but with the possibility of rotation to quality cyclicals."
Investors' focus is shifting to Fed Chairman Jerome Powell's testimony before Congress later in the week for clues on monetary policy. FED/DIARY
"What the market will be looking for is whether the language is as dovish as previously (at last policy meeting)," said Christy Tan, head of market strategy for Asia at National Australia Bank. "There's been some over-dovishness in what the Fed needs to do in the market."
DOLLAR STRENGTH
In the currency market, fading Fed cut expectations helped the dollar. FRX/
The euro traded at $1.1213 EUR= , near Monday's low of $1.1207, its weakest level since June 19.
The dollar changed hands at 108.75 yen JPY= , having risen up to 108.81 yen in the previous session, its highest in more than a month.
The dollar index .DXY versus a basket of six major currencies was little changed at 97.374.
The British pound stood at 1.2508 GBP=D4 , not far from six-month lows of $1.2481 touched on Friday.
Oil prices were slightly softer as concerns about whether slowing global economic growth would hit oil demand eclipsed tensions over Iran's nuclear programme.
Brent crude LCOc1 futures fell 0.4% to $63.87 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures shed 0.42% to $57.42.