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China stocks off lows after MOF calls news conference

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Shanghai Composite -4%; Hang Seng flat

(Updates prices to 0600 GMT)

By Tom Westbrook

SINGAPORE, Oct 9 (Reuters) - Chinese shares slumped and

commodities were struggling to find a footing on Wednesday as

investors tempered expectations for a robust Chinese economic

recovery, while a downbeat outlook from New Zealand's central

bank sent the kiwi to a seven-week low.

The Shanghai Composite and blue-chip CSI300

nursed losses of around 4% in afternoon trade, paring

much larger falls when the finance ministry called a press

conference on fiscal policy and raised expectations of stimulus.

Hong Kong's Hang Seng bounced to flat and the

Australian dollar shed losses.

China's surging markets had turned suddenly fragile and

commodities from oil to metals fell on Tuesday when a news

conference from China's National Development and Reform

Commission yielded no major new stimulus details.

"To be fair only the Ministry of Finance or State Council

can adjust the budget," said Nick Ferres, chief investment

officer at Vantage Point Asset Management, as focus shifted to

the Oct. 12 announcement and Monday's market reaction.

Markets are looking for a spending package between 2 and 10

trillion yuan ($280 billion to $1.4 trillion) and Ferres said

his sense was that support needs to be on top of previous

commitments and boost GDP by about 2 percentage points to be

helpful.

Dalian iron ore and Shanghai copper pared losses in the

afternoon but were still in the red. Brent crude futures

, which fell 4.6% overnight, steadied at $77.88 a barrel.

Japan's Nikkei rose 1%, with shares in convenience

store Seven & I Holdings ( SVNDF ) leaping after Bloomberg News

reported Canadian retailer Alimentation Couche-Tard ( ANCTF )

would raise its buyout offer.

PATIENCE

Traders have so far regarded China's stocks slide as an

overdue pullback after a hefty 25% surge in the previous six

sessions.

Still, the drops leave mainland stocks on course for their

largest losses since April 2022, when pandemic lockdowns were in

force in major cities.

Just about every sector was down in China, though property

and tourism were heavily beaten-down

in a sign of some doubts that state support will be large and

swift enough to turn around consumers' confidence.

"We think markets can still re-rate up from here, but

policymakers will need to start showing their cards or investors

will lose patience over how the broader domestic economy,

especially consumption, can recover," said Eugene Hsiao, head of

China equity strategy at Macquarie Capital.

"The other variable remains macro, as the PBOC's monetary

policy could be more handcuffed if Fed rate cuts do not

materialise as quickly as planned," he said.

Market expectations of Federal Reserve rate cuts have been

pared back following strong labour market data last week,

lifting yields and the dollar which was the backdrop to a 0.9%

slide for the New Zealand dollar in the Asia session.

The kiwi fell through its 200-day moving average to a

seven-week low after the central bank cut interest rates by 50

basis points and left the door open to more.

"We expect another 50bps cut in November. The Kiwi economy

needs it," said Kiwi Bank chief economist Jarrod Kerr.

The dollar also rose slightly to 148.525 yen and

$1.0971 per euro.

Treasuries steadied following recent selling, leaving U.S.

two-year yields at 3.96% and 10-year yields

at 4.01%.

Minutes from the Fed's September meeting - where U.S. rates

were cut 50 bps - are due later in the session, along with

appearances from the Fed's Raphael Bostic, Lorie Logan and Mary

Daly.

($1 = 7.0560 Chinese yuan renminbi)