Updates

** Shares of Australia's Treasury Wine Estates TWE.AX recoup some early losses, last down 3.9% at A$10.72

** Stock falls as much as 8.5% earlier in the day, as co drops planned sale of its cheaper brands and lowers earnings forecast

** TWE's H1 results mostly upbeat as exports to China roar back to life after the end to three years of crippling tariffs imposed by Beijing

** Co seems to have increased confidence about its ability to sell into China, say analysts at Citi

** Say increased confidence reflects brand health, depletion trends and rising customer demand, a move which might suggest upside to multi-year earnings rise for Penfolds brand

** Feeling incrementally more positive on China prospects post conference call - Citi

** Stock down 7.2% this year, including day's move

($1 = 1.5929 Australian dollars)

(Reporting by Rishav Chatterjee and Aaditya Govind Rao in Bengaluru)

((Aaditya.govindrao@thomsonreuters.com;))