(Updates at 0145 GMT)

By Rae Wee

SINGAPORE, Oct 8 (Reuters) - Mainland Chinese stocks

returned from an extended break with a roaring start on Tuesday,

scaling multi-year highs as investor exuberance over Beijing's

aggressive stimulus measures showed no signs of easing.

The optimism though failed to spill over into other share

markets in Asia, particularly Hong Kong, which reversed some of

the rally it enjoyed while China was out on a week-long holiday.

China's CSI300 blue-chip index surged 10% in early

trade to its highest level since July 2022, while the Shanghai

Composite Index jumped roughly the same amount to its

highest mark since December 2021.

But Hong Kong's Hang Seng Index tumbled 3.9%, with

the Hang Seng Mainland Properties Index sliding more

than 7%.

That left MSCI's broadest index of Asia-Pacific shares

outside Japan down more than 1%.

"I think the movement today basically just explains that in

the Chinese onshore market, it's just rising to a level that

investors are comfortable with. And in Hong Kong, there may be a

bit of a profit taking or breaking even move," said Gary Ng, a

senior economist at Natixis.

"Because no one is really certain about what is going on in

the stimulus... there could be a bit of uncertainties about

whether it is above or below market expectations."

Investors are watching a press conference by China's

National Development and Reform Commission, the country's

national economic and social planning agency, for further

details about the stimulus pledges which had also sparked a

rally in Chinese stocks before the holidays.

Elsewhere, Tokyo's Nikkei fell more than 1%.

S&P 500 and Nasdaq futures were steady.

Fears of a widening conflict in the Middle East sapped

bullish sentiment after Hezbollah on Monday fired rockets at

Israel's third-largest city, Haifa, and Israel looked poised to

expand its offensive into Lebanon, one year after the

devastating Hamas attack on Israel that sparked the Gaza war.

Worries such a conflict would disrupt oil supplies sent

Brent crude futures on Monday surging above $80 a barrel

for the first time in over a month, although they pared some

gains on Tuesday in Asia.

The front month was last 0.58% lower at $80.45 per barrel,

while U.S. crude futures shed 0.53% to $76.73 a barrel.

Analysts at ANZ said concerns Israel might target Iran's oil

infrastructure had fuelled the rally and that comments from U.S.

President Joe Biden hadn't eased the fears.

"We still think a direct attack on Iran's oil facilities is

the least likely of Israel's retaliation options."

FED BETS

In the broader market, investors were reassessing the

outlook for the path of the Fed's easing cycle after Friday's

blockbuster U.S. jobs report.

Any chance of another 50-basis-point rate cut next month has

been erased and traders are pricing in a 12% chance the Fed

could keep rates on hold. Just 50 bps worth of cuts are priced

in by December.

Expectations of a less-aggressive Fed trajectory kept the

benchmark 10-year U.S. Treasury yield above 4% in

Asia trade.

The two-year U.S. Treasury yield hovered near its

highest level in over a month and last stood at 3.9556%.

"While confidence about another 50-bp cut is justifiably

dampened... the Fed rate cut cycle is far from derailed," said

Vishnu Varathan, head of macro research for Asia ex-Japan at

Mizuho Bank.

"Admittedly, the all-around blockbuster jobs report is

justifiable cause to reassess overzealous 'pivot bets' on

front-loaded, outsized cuts."

Still, the U.S. dollar failed to get a further lift on the

revised Fed expectations, having already had a strong run last

week, in part owing to safe-haven gains linked to Middle East

news.

The dollar was on the back foot in early Asia trade, falling

0.35% against the Japanese yen to 147.68, while

sterling rose 0.07% to $1.3094.

Against a basket of currencies, the greenback eased 0.1% to

102.38, though it hovered near a seven-week high hit on Friday.

The Chinese yuan played catch up,

sliding against the dollar following the U.S. unit's post job's

report strength.

Elsewhere, spot gold was little changed at $2,645 an

ounce.