Pallade Veneta - Chinese shares drop on stimulus upset, Asia tracks Wall St higher

After blockbuster performances in the wake of last month's announcements to kickstart growth, traders were left deflated Tuesday after a news conference that fell short of expectations and revived worries about the outlook.

A rally on Wall Street, helped by a plunge in oil prices and optimism over the US economy, did little to lift sentiment on Chinese trading floors, though most other markets in Asia enjoyed gains.

Investors are now keeping tabs on developments out of Beijing, hoping for more indications about officials' plans, though analysts warn there is unlikely to be the big "bazooka" stimulus akin to the support seen during the global financial crisis.

Shehzad Qazi at China Beige Book said the news conference "underscored that Beijing does not feel the need to do 'whatever it takes'.

"Instead it's opting for targeting stimulus -- including allocating funds for projects previously announced. The irony is markets would've continued rallying had there been no press conference.

"The only upside of (Tuesday's) event was injecting a much needed dose of reality."

Hong Kong had soared more than 20 percent between the first batch of measures being announced and Monday, but it collapsed more than nine percent Tuesday -- its worst day since 2008.

It extended losses Wednesday as traders struggled to get back on track.

Shanghai fell more than three percent -- having seen a 10 percent opening rally Tuesday pared to just over four percent.

Still, most other markets in the region rose as investors took their lead from New York, where tech firms led the way on optimism over the world's top economy in the wake of Friday's forecast-topping jobs data.

Tokyo rose, with Seven & i Holdings -- the owner of the 7-Eleven convenience store chain -- piling on more almost five percent after a report said Canada's Alimentation Couche-Tard had hiked its takeover offer for the company by almost 20 percent to $47.2 billion.

Sydney, Singapore, Taipei, Wellington and Jakarta also rose, though Manila dipped.

While the US jobs figures dented expectations for a second successive bumper interest rate cut this month, they did temper worries about a possible recession.

US consumer and producer prices data towards the end of the week should provide further clues on the interest rate outlook, while third-quarter earnings season kicks off on Friday.

Oil prices inched up but made little headway into the losses of almost five percent suffered in the previous session that came on the back of doubts about Chinese demand and after Israel faced international pressure not to strike Iranian crude installations.

Fears about Tel Aviv's response to Iran's missile attack last week had sent the commodity soaring Monday to their highest levels since August.

Healthy US stockpiles and expectations of ample supply both in and out of OPEC also weighed on the black gold.

- Key figures around 0230 GMT -

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 20,683.58

Shanghai - Composite: DOWN 3.6 percent at 3,363.31

Tokyo - Nikkei 225: UP 0.6 percent at 39,178.70 (break)

West Texas Intermediate: UP 0.1 percent at $71.65 per barrel

Brent North Sea Crude: UP 0.1 percent at $77.29 per barrel

Euro/dollar: DOWN at $1.0972 from $1.0981 on Tuesday

Pound/dollar: DOWN at $1.3095 from $1.3100

Dollar/yen: DOWN at 148.14 from 148.29 yen

Euro/pound: DOWN at 83.77 pence from 83.79 pence

New York - Dow: UP 0.3 percent at 42,080.37 (close)

London - FTSE 100: DOWN 1.4 percent at 8,190.61 (close)

J.Lubrano--PV