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Shares in disarray over China crisis US shares end choppy day with big jump
(about 5 hours later)
Wall Street shares are sharply higher, with the Dow Jones 1.3% up, after losing ground on Tuesday. Shares on Wall Street finished with their biggest rise in four years ending another rocky day of trading on global markets.
At the same time, European stock markets lost ground as fears persist of a China-led economic downturn. The mood was lifted by comments from US Federal Reserve official William Dudley that a rate rise in September seemed "less compelling".
The Dow Jones closed up 3.97% at 16,285.64.
Earlier, European stock markets lost ground again as fears persist of a China-led economic downturn.
London's FTSE 100 closed down by 1.7% , with markets in Paris and Frankfurt finishing down by 1.4% and 1.3% respectively.London's FTSE 100 closed down by 1.7% , with markets in Paris and Frankfurt finishing down by 1.4% and 1.3% respectively.
Experts expect more market volatility until the Federal Reserve meets in September to set US interest rates. Earlier on Wednesday, economic figures seemed to back the case for a rise in US interest rates at the Fed policy meeting on September 16-17.
Durable goods orders rose 2% in July, compared with forecasts of a 4% fall. Orders for core capital goods rose 2.2%, the biggest gain in 13 months.
But analysts say there still likely to be more market volatility until the Federal Reserve meets next month.
"Until we get September out of the way, I think markets will continue to be choppy," said Michael Hewson, chief market analyst at CMC Markets."Until we get September out of the way, I think markets will continue to be choppy," said Michael Hewson, chief market analyst at CMC Markets.
"These are the sorts of swings that we last saw in 2008," he added."These are the sorts of swings that we last saw in 2008," he added.
With the wild movements in global markets, Mr Hewson said he did not expect a rate rise out of the US next month, in part because of the central bank's mandate to maintain financial stability.With the wild movements in global markets, Mr Hewson said he did not expect a rate rise out of the US next month, in part because of the central bank's mandate to maintain financial stability.
"I think they would be absolutely bonkers to raise rates now," he said."I think they would be absolutely bonkers to raise rates now," he said.
China contagionChina contagion
On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil.On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil.
The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past several sessions.The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past several sessions.
The interest rate cut was the fifth by the People's Bank of China since November last year.The interest rate cut was the fifth by the People's Bank of China since November last year.
The move is aimed at boosting China's growth long-term, rather than having an immediate impact on investors.The move is aimed at boosting China's growth long-term, rather than having an immediate impact on investors.
Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe.Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe.
A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks.A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks.
On Wednesday, the Shanghai index fell 1.27% to 2,927.29, after veering in and out of negative territory.On Wednesday, the Shanghai index fell 1.27% to 2,927.29, after veering in and out of negative territory.
Analysis: Robert Peston, BBC business editorAnalysis: Robert Peston, BBC business editor
In some ways I thought yesterday's events on markets were if anything more disturbing than Monday's global rout.In some ways I thought yesterday's events on markets were if anything more disturbing than Monday's global rout.
Because if share-price gains could not hold after the significant monetary easing by China's central bank, then mistrust about the true state of the world's second largest economy (actually the number-one economy on the purchasing-power-parity measure of GDP) has become very pronounced indeed.Because if share-price gains could not hold after the significant monetary easing by China's central bank, then mistrust about the true state of the world's second largest economy (actually the number-one economy on the purchasing-power-parity measure of GDP) has become very pronounced indeed.
And another thing, the Chinese interest rate cuts will exacerbate the phenomenon that has caused so much stress in so many different global markets, from commodities, to foreign exchange, to stocks and bond - the fall in the Chinese currency, the RMB, since it was allowed by Beijing to float more freely on 11 August.And another thing, the Chinese interest rate cuts will exacerbate the phenomenon that has caused so much stress in so many different global markets, from commodities, to foreign exchange, to stocks and bond - the fall in the Chinese currency, the RMB, since it was allowed by Beijing to float more freely on 11 August.
Read more from our experts:Read more from our experts:
Robert Peston: China's woes and a still flawed global economyRobert Peston: China's woes and a still flawed global economy
Duncan Weldon: What next for the global economy after China market woes?Duncan Weldon: What next for the global economy after China market woes?
Andrew Walker: How the China share slump affects the rest of the worldAndrew Walker: How the China share slump affects the rest of the world
Karishma Vaswani: China counts cost of Black MondayKarishma Vaswani: China counts cost of Black Monday
Read more: The six Cs of the China stock slumpRead more: The six Cs of the China stock slump
The stocks fall in facial expressionsThe stocks fall in facial expressions
Optimism elsewhereOptimism elsewhere
Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points.Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points.
The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions.The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions.
South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80.South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80.