After nearly 20% in losses over the last three days, Asian shares struggled to maintain gains in early Wednesday trading amid concerns that rate cuts in China would not be a sufficient measure to stop the collapse in stock markets. Key China indexes made several attempts at moving higher but fell back after waves of sell-offs as investors view measures taken by the Chinese central bank and government as insufficient. China’s CSI300 index was 1.7% after a volatile morning. The Shanghai Composite Index gained 0.8% and MSCI's broadest index of Asia-Pacific shares outside Japan remained flat and near three-year lows hit yesterday. The Japanese Nikkei 225 was one of the better performers with a 2.35% gain by mid-day.
European shares rebounded yesterday after suffering their worst sell-off in nearly seven years. The STOXX 600 added 4.2% to close yesterday’s session at 356.29 after China’s central bank announced that it would cut interest rates. After declining 5.3% yesterday, the pan-European index recovered most of the previous session’s losses. The German DAX performed a similar feat as it more-than compensated for Monday’s losses. The DAX added 479.69 points, or 4.97%, to trade at 10,128.12 after Monday’s 476-point decline. The index is also up for the year, albeit modestly. German shares were also aided by a better-than-expected Ifo survey of German business confidence. The French CAC 40 climbed 4.1% to trade at 4,564.86 as it recouped most of the previous day’s losses and the UK’s FTSE 100 gained 3.1% to trade at 6,081.34 after falling 4.7% on Monday.
U.S. shares traded on a positive note on Tuesday but erased all gains in a late-session sell-off. The S&P 500 Index fell 25.6 points, or 1.35%, to trade at 1867.61. The Dow Jones Industrial Average was down by 204.91 points, or 1.29%, to trade at 15,666.44. The Nasdaq Composite fell 19.79 points, or 0.44%, to trade at 4506.49. The U.S. dollar lost momentum as traders moved away to safe-haven investments after the global market turmoil created widespread uncertainty over the possibility that the Federal Reserve would raise interest rates next month. The euro remained relatively flat against the dollar but still maintained modest gains at $1.1485. The dollar also weakened against the Japanese yen, falling to 119.34 after a brief climb above 120.
U.S. durable goods orders will be released today followed by U.S. GDP data on tomorrow. The U.S. GDP release carries significant importance as analysts try to weigh in on the possibility that the Federal Reserve will back away from a rate hike this year. UK GDP will be released on Friday, followed by German inflation data.