By Samuel Shen and Tom Westbrook

SHANGHAI/SINGAPORE (Reuters) - China's stock markets roared back from a week-long break to reach their highest levels in more than two years at the open, before paring gains after officials failed to inspire confidence in stimulus plans intended to revive the economy.

Hong Kong's Hang Seng index is the best performing major market this year, having seen its steepest rally in a generation over recent weeks, and continuing to post gains during the onshore holiday. But on Tuesday, it closed 9.4% lower - its heaviest fall since 2008.

Economic planner chairman Zheng Shanjie told reporters China was "fully confident" of achieving economic targets for 2024 and would pull forward 200 billion yuan ($28.36 billion) from next year's budget to spend on investment projects and support local governments.

But his failure to detail sufficiently big or new measures rekindled market doubts about Beijing's commitment to ensuring the world's second largest economy can climb out of its most serious slump since the global pandemic and reach 5% growth.

The Shanghai Composite closed 4.6% higher while the blue-chip CSI300 rose 5.9% - big moves but below gains of more than 10% seen early in a rollercoaster day with turnover of a record 3.45 trillion yuan.

"Ultimately for the rally to be sustainable, we need to see more fiscal policy and more measures to support the economy and the property market," Vasu Menon, managing director of investment strategy at OCBC in Singapore, said.

"A great deal of hope has been built into the strong rally in recent weeks and we now need to see additional government policy action to support the uptrend."

China-exposed assets around the world were also caught up in the selling. The Australian dollar fell 0.5% and the yuan headed for its sharpest drop in 10 months.

Iron ore and other industrial metal prices slid, with the steel ingredient at one point down 5% in Dalian and London copper hitting its lowest in two weeks.

Global miners Rio Tinto and BHP fell in Australia, while, in Europe, miners were down 4% on track for their biggest daily fall in 18 months and luxury stocks tumbled.

FRENZY AND INDEX FUNDS

Before the Golden Week break, China announced the most aggressive stimulus measures since the pandemic and the CSI300 gained 25% over five sessions.

Flows on Tuesday were directed at broad index funds and pockets of the market expected to benefit from government largesse.

By midday, nearly 20 exchange-traded funds traded at a premium of more than 20% to the value of their assets, as funds rushed in faster than they could be rerouted to buy shares.