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 .CSI300 surged 10% in early trade to its highest level since July 2022, while the Shanghai Composite Index .SSEC jumped roughly the same amount to its highest mark since December 2021.

But Hong Kong's Hang Seng Index .HSI tumbled 3.9%, with the Hang Seng Mainland Properties Index .HSMPI sliding more than 7%.

That left MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS 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 .N225 fell more than 1%.

S&P 500 ESc1 and Nasdaq futures NQc1 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 LCOc1 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 CLc1 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 afterFriday'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. FEDWATCH

Expectations of a less-aggressive Fed trajectory kept the benchmark 10-year U.S. Treasury yield US10YT=RR above 4% in Asia trade. US/

The two-year U.S. Treasury yield US2YT=RR 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 JPY=EBS to 147.68, while sterling GBP=D3 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 CNY=CFXS, CNY=D3 played catch up, sliding against the dollar following the U.S. unit's post job's report strength.

Elsewhere, spot gold XAU= was little changed at $2,645 an ounce. GOL/

Reporting by Rae Wee: Editing by Shri Navaratnam and Neil Fullick

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