SHANGHAI: Shanghai shares see-sawed in early trade Wednesday, after Beijing's move to cut interest rates and free up cash for banks failed to restore confidence in China's growth and arrest the crisis that has rattled global markets.
China's central bank reduced interest rates and slashed the amount of money banks need to hold in reserve on Tuesday -- its second such double move in two months -- in a bid to bolster its economy and end the worst stock market rout in almost two decades.
The cuts initially fuelled a rebound in global equities, with European shares surging after their heaviest losses since the 2008 financial crisis on Monday as panic about China gripped world markets.
But the optimism fizzled by the end of trading in the US, with Wall Street finishing in negative territory after strong early gains, as the spectre of a hard landing in the world's number two economy returned.
"A circuit-breaker is needed to dispel excessive pessimism and restore confidence," Frederic Neumanm, co-head of Asian economics research at HSBC in Hong Kong, told Bloomberg News.
"Further support measures in the coming weeks and months will be needed."
Jitters continued in Shanghai on Wednesday, with China's benchmark index opening 0.53 percent higher, then falling as much as 2.31 percent before returning to positive territory, all within the first 20 minutes.
By mid-morning, the benchmark Shanghai Composite Index was down 3.03 percent, or 89.87 points, to 2,875.10.
The Shenzhen Composite Index, which tracks stocks on China's second exchange, slid 3.64 percent, or 63.62 points, to 1,685.45.
Other Asian shares also wobbled, with Seoul and Sydney falling, Tokyo up after its worst two-day falls since 2011 and Hong Kong trading flat.
Zhang Yanbing, an analyst from Zheshang Securities, said the central bank's cuts had tamed the "panic sentiment" that had gripped Shanghai, but warned: "There will still be fluctuations as views towards the market's prospects are divided."
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