*

China stocks notch up biggest daily drop since pandemic

*

Finance ministry calls news conference for Saturday

*

European shares eke out slim gains

*

Defensive sectors in demand in Europe

*

Dalian iron ore, Shanghai copper under pressure

(Updates prices as of 0747 GMT)

By Tom Wilson and Tom Westbrook

LONDON/SINGAPORE, Oct 9 (Reuters) - China's runaway

stocks rally stuttered and commodities struggled to find a

footing on Wednesday as investors tempered their expectations

for a robust Chinese economic recovery, keeping pressure on

shares globally.

Benchmark indexes in China notched up their biggest daily

losses since the COVID-19 pandemic began, with stocks in

Shanghai and blue-chips closing down 6.6% and

7.1% respectively, snapping a 10-day winning streak.

China's surging markets had turned suddenly fragile a day

earlier, with commodities from oil to metals falling, when a

news conference from China's National Development and Reform

Commission yielded no major new stimulus details.

Investor attention will now turn to a news conference by

China's finance ministry scheduled for Saturday, which will

detail plans on fiscal stimulus to boost the economy, signalling

more forceful policies to revive growth.

Markets are looking for a spending package between 2 and 10

trillion yuan ($280 billion to $1.4 trillion).

Nick Ferres, chief investment officer at Vantage Point Asset

Management, said support needed to be on top of previous

commitments and boost GDP by about 2 percentage points to be

helpful.

Still, other market players said there were some reasons for

optimism.

"If you take the whole picture, you still see a trend, which

is domestic stocks are faring a bit better - an indication for

foreign investors that the stimulus is good news for China's

economy," Alexandre Marquis, senior portfolio manager at asset

manager Unigestion, said.

MSCI world equity index, which tracks shares

in 47 countries, fell 0.2%

The uncertain mood spilled into European trading, with the

continent's stocks squeezing out gains of 0.1%. The

utilities, healthcare and real estate

sectors - considered as a safer bet during times of uncertainty

- were in demand.

Commodities, the fate of which are tied to China's economy,

were also under pressure.

Dalian iron ore and Shanghai copper posted losses, while

Brent crude futures, which fell 4.6% overnight, steadied

at $77.89 a barrel.

Elsewhere, Japan's Nikkei rose 1%. Shares in Seven &

I Holdings ( SVNDF ) - the owner of 7-Eleven convenience stores -

added 4.7% after Bloomberg News reported Canadian retailer

Alimentation Couche-Tard ( ANCTF ) would raise its buyout offer.

If it were to go ahead, the deal would be the largest

overseas buyout of a Japanese firm.

FED MINUTES

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

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

sessions.

Just about every sector was down in China. Property

and tourism were heavily beaten-down

in a sign of 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 direction of U.S. interest rate cuts was also in focus,

investors said.

Minutes from the U.S. Federal Reserve's September meeting -

where U.S. rates were cut 50 bps - are due later on Wednesday,

along with appearances from the Fed's Raphael Bostic, Lorie

Logan and Mary Daly.

Market expectations of Federal Reserve rate cuts have been

pared back following strong labour market data last week,

lifting yields and the dollar.

That backdrop saw a 0.9% slide for the New Zealand dollar in

the Asia session, with the kiwi falling to a seven-week low

after the central bank cut interest rates by 50 basis points and

left the door open to more.

The dollar was up 0.2% against the Japanese yen at 148.535

yen, and at $1.096 per euro.

($1 = 7.0560 Chinese yuan renminbi)