The Dow leaps 619 points after two days of China woes - as it happened

Sam Thielman in New York, Graeme Wearden in London

from on 2015-08-26 20:23 (#JF3J)

9.23pm BST

It was a long day of erratic trading in US markets today, with a rapid liftoff just after the bell and a close that marked biggest single-day gains in the Dow Jones Industrial Average and the S&P 500 since 2011.

Federal Reserve policymaker William Dudley walked back hints that an interest rate hike was imminent, calling the increase a safer bet for October than September, as previously indicated by Janet Yellen.

9.06pm BST

The Dow surged to a high of 627 points and closed at 619 up after a frantic day of ups and downs - that makes today the third-highest increase (in points, not percentage) in its history. Both of the others happened early in the financial crisis.

8.22pm BST

The Dow is up more than 500 points, because truly, for absolute certain, nobody has any idea what's going on.

Interpreting the stock market today: \_(af)_/

8.05pm BST

Provided 3:00 to 4:00 today looks different from the same time period yesterday, we're on track for the Dow to close up 400 points. An hour shy of the bell, the standings are solid across three major indexes.

7.27pm BST

Uniquely unworried in all the market hubbub is seed fund Ycombinator. The company just released a slew of statistics about its investments - all private concerns with cash from Ycombinator and other investors giving them a boost - including that its 940 companies had raised some $7bn by themselves.

Chief Operations Officer Qasar Younis said the fund had just had its "demo day," during which some 500 investors check out its constituents. Younis didn't think the current trouble in China would cause too much trouble for the startup world - "I think the economy's strong, rates are healthy, housing stats are good," he said (durable goods beat predictions by a health margin earlier today). But he did believe a longer fall could cause trouble.

You should never be beholden to investor capital. The easiest way to control your company is to be a profitable, stand-alone business. Chasing deals isn't a sustainable business strategy. Even in good times, the advice is the same: manage your cash.

7.16pm BST

The Dow is now up 335 points at 2:15 p.m., good but not quite at its highest point for the day. The market is anxious to avoid a seven-day losing streak but yesterday and Monday both had ups and downs before stocks finally came crashing back to their starting positions (and below) at the closing bell.

6.55pm BST

A couple of commodities charts giving perspective over the last few months, since the selloff in that sector is a large part of today's news (and news of the past week).

Gold:

6.16pm BST

Barrick Gold is at levels not seen since 1989 pic.twitter.com/Vs5kxm7bwa

As the market rallies, companies associated with commodities are on the way down: Barrick Gold, a mining concern, had an incredible peak during the financial crisis and recently now lost all those gains and more.

5.54pm BST

Here's an interesting one from Doug Short: a graph of the S&P 500 starting Oct. 9, 2007, at the beginning of the financial crisis and continuing through the present day. The index is down 9.29% for the year thus far, but this most recent dip is the second-deepest of the recovery so far.

5.32pm BST

5.30pm BST

If you're just tuning in, here's our latest news story on today's developments:

5.22pm BST

Sam Thielman in New York taking over the liveblog from Graeme - it's a grim day in New York as news of a grisly murder in Virginia dominates headlines coverage. The Dow took off early this morning but has zigged and zagged downward toward its opening price.

There's another scuttled deal after yesterday's no-go notice for the Pepco-Exelon merger, but this one is good for at least one party: Monsanto has said it's not going to continue to pursue the acquisition of Swiss company Syngenta and is trading up on the news.

5.17pm BST

What a dramatic week it's been already:

FTSE 100 chart of the week so far (h/t @DuncanWeldon for the Wednesday label). pic.twitter.com/uDOnO5MBBe

5.04pm BST

26bn was knocked off the value of the FTSE 100 companies today, calculates Sky News.

Stock Market Turmoil: 26bn Wiped Off FTSE 100 http://t.co/ElqLa4YpJs pic.twitter.com/5FMdWJEQdG

5.01pm BST

Today's selloff pushes the FTSE 100 deeper into correction territory. It's currently 15% off its record high.

4.56pm BST

European stock markets have just posted chunky falls, in a late selloff that suggests investors on this side of the Atlantic remain anxious.

The FTSE 100 index of blue-chip shares fell by 102 points to close at 5979, back below the 6,000 point mark. It has now fallen for 11 of the last 12 days (yesterday it jumped by 188 points)

The source of the rebound on Wednesday was a move by the People's Bank of China to inject 140bn yuan ($21.8bn) into the economy, a day after cutting interest rates and bank reserve ratios. It's clearly a positive that Chinese authorities have woken up to the problem at hand, it's just a bit of a worry it took them this long.

Rather than getting ahead of the game with a well thought out plan for stabilising the economy, the People's Bank of China appears to be reluctantly easing policy any time there's a drop in share prices. The net effect is that markets clamour for more stimulus while at the same time losing faith it will actually work.

4.40pm BST

City pros talk about 'Dr Copper', because the metal's price is seen as a good indicator of the health of the global economy.

This chart, from Royal Bank of Scotland, suggests the patient is ailing:

Add to the mix the fall in that old favourite global growth indicator. The copper price @JeremyWarnerUK @DuncanWeldon pic.twitter.com/8G9jCI8ymR

4.27pm BST

Our rivals at the Financial Times in London have spotted a rainbow over the City.

There aren't many pots of gold on offer in the equity market tonight, though, with the FTSE down around 1.2% in late trading.

Looks like treasure at the end of the rainbow - somewhere near the @bankofengland ... pic.twitter.com/dMA1BNDfNB

3.56pm BST

William Dudley's comments on a September rate hike are significant, as he had previously been one of the FOMC members pushing for a rate raise.

Here's the key quote from today's press conference:

"From my perspective, at this moment, the decision to begin the normalisation process at the September FOMC process seems less compelling to me than it was a few weeks ago."

3.53pm BST

The former CEO of bond giant Pimco, Mohamed El-Erian, got the message:

FYI,Bill #Dudley confirms that a Sept @FederalReserve hike is less compelling and, therefore, less likely. #economy #markets @NYFed_data #fx

3.52pm BST

The current stock market turmoil did not start in the US, Dudley adds, but doesn't go into much detail:

3.41pm BST

Bingo! Federal Reserve policymaker William Dudley has just declared that a September interest rate hike is less likely.

Dudley told his audience in New York said that recent data has been "pretty positive", but international developments (hello, China) have raised the downside risks.

BREAKING: Fed's Dudley says September rate hike looks less compelling http://t.co/Ta0s9pbWUr pic.twitter.com/GM6FQNiIae

3.35pm BST

After an hour of trading, the Wall Street rally has lost a little of its fizz.

The Dow Jones is bobbing around the 15,950 mark, a gain of around 300 points. That's not a particularly strong position, given the recent sharp losses:

3.14pm BST

William Dudley, president of Federal Reserve Bank of New York, is giving a speech now, but he's avoiding saying anything too controversial.

Traders had been looking for guidance on possible rate hikes, or the China crisis. But instead, Dudley's prepared speech sticks to New York issues.

Here's his speech pic.twitter.com/iqhlpPyzQk

2.56pm BST

Having watched yesterday's volatility, our US business editor Dominic Rushe fears that today's rally may not last until the closing bell.

Here's his early take.

Dow Jones surges over 400 points (come back for Wall St down story in the PM) #dejavu http://t.co/1iZyaZ6yGh pic.twitter.com/96jWGZVEle

2.53pm BST

2.51pm BST

Every share on the Dow is up in early trading.

Pharmaceutical company Merck is fastest out of the blocks, gaining 4.4% [having been the biggest faller yesterday].

2.39pm BST

Looks like another day of @cnbc and too much chocolate. pic.twitter.com/U7N9uwIxVs

2.35pm BST

The rally is on! For the second day day running, Wall Street has surged at the start of trading.

2.32pm BST

US stocks are rising, pushing the Dow Jones industrial average up by 350 points, or 2.3%, in the first two minutes of trading.

It's still climbing too.....

2.30pm BST

The Wall Street bell is being rung, and trading gets underway in New York.....

2.12pm BST

New York authorities have invoked 'Rule 48', a regulation designed to help the market open smoothly when volatility is high.

2.07pm BST

Even if Wall Street does rally this morning, traders will surely be anxious after yesterday's late selloff.

That saw the Dow leap by 3%, only to finish down 1.3% by the closing bell.

"These type of swings are typical when the market behaves in a way that is a real test of nerves and there is a lot ofongoing uncertainty."

1.38pm BST

Hold onto your hats, we're getting some decent economic news out of America.

Orders for durable goods (long-lasting manufactured goods) spiked by 2% in July, surprising economists who had expected a 0.4% decline.

HUGE beat on the data.

1.22pm BST

New York traders are preparing for a surge of buying when the market opens, in an hour's time.

It's gonna be huge: Dow futures up 300 points

1.11pm BST

The prospect of more central bank easing has had a predictably uplifting effect on European markets.

The euro has fallen by 1% since ECB chief economist Peter Praet hinted that it could take fresh action to fight deflation. It has hit $1.1404, down from $1.151 last night.

12.51pm BST

This is rather neat - a timeline showing how the Shanghai composite index soared then tanked this year, and the actions that Beijing policymakers took along the way:

China's stunning stock market moves in one huge, annotated chart. http://t.co/mxYFBPcBF6 via @TomOrlik pic.twitter.com/PgqXQDrnp7

12.11pm BST

The European Central Bank's chief economist just dropped a loud hint that it could take fresh action to stimulate Europe's economy.

Falling commodity prices, and signs of economic weakness, mean there is a greater risk that Europe misses its inflation targets, Peter Praet told journalists in Mannheim, Germany. If so, the ECB would act, he insisted.

"Developments in the world economy and commodity markets have increased the downside risk in achieving the sustainable inflation path towards 2 percent; the risk has increased.

"The governing council will closely monitor all incoming information," he said. "There should be no ambiguity on the willingness and ability of the governing council to act if needed."

#ECB's Praet: Clear that downside risks to inflation goal have increased. Inflation expectations (5y5y) have dropped. pic.twitter.com/rKOAKo77kY

A settled definition of ECB #QE2 would be helpful. What combination of: 1) more monthly a 2) beyond Sept 2016 3) extended range of assets

11.38am BST

Time for a recap.

World stock markets are enduring another volatile day, with fresh losses in China and across Europe.

Whilst it may be a case of the central bank using a pack of plasters when surgery is needed, investors appeared to react more positively to the news than they have done to other inventions by the PBOC in the past fortnight.

It means the FTSE has tentatively climbed past the 6000 mark, with the DAX sporadically re-crossing the 10000 level.

Dow Jones looks set top open 264 points higher to 15934

You already know it's risky to be political journalists in China - Now financial reporter is risky job too amid #ChinaMeltdown stock crisis!

Interesting policy discussions in China about stock market plunge. China Authorities Escalate Blame Game http://t.co/4UHCwxOLOF

11.22am BST

10.58am BST

Sir Martin Sorrell isn't the only one feeling bullish about China, despite the current market rout.

William Fong of Baring Asset Management agrees that the country's long-term growth prospects are still rosy:

We like companies aligned with government policy as the process of urbanisation and improving China's environment continues. We also like beneficiaries of rising consumption and technological outfitting as companies move along the value chain, as well as "New China" brands, able to compete with the biggest names.

Everyone knows about Tencent and Lenovo, but we think the future is bright for companies such as Geely Automobile, a Chinese car maker able to sell in the EU, and Provence-style body and skincare brand L'Occitane, which has international as well as domestic exposure.

10.37am BST

Photographers were lining up to capture today's 1.5% fall on the Hong Kong stock market:

10.23am BST

Despite the losses in China, and Europe, the US stock market is tipped to jump by more than 1% when trading begins in four hours time.

But don't put your last fiver on it, given the way the Dow Jones flopped in late trading last night.

Dow futures up about 200. So we're giving this another go?

10.20am BST

Britain would be less badly hit than other advanced economies if China's economy weakens sharply.

So argues Oxford Economics, anyway. Here's their logic:

As a key player in the global economy and an increasingly important market for UK exports, a prolonged slowdown in the Chinese economy would hit the UK's growth prospects.

But the risk of a Chinese 'hard-landing' could also deliver benefits for the domestic economy, via cheaper commodities and by staying the MPC's hand in raising interest rates. Simulations using the Oxford Global Economic Model suggest that a structural hit to Chinese growth would be a net negative to the UK, but less so than for many other economies.

10.05am BST

9.56am BST

Significant developments: China's central bank is injecting 140bn yuan into the interbank money market to avoid liquidity drying up.

#Chinese Central Bank will inject 140Bn yuan via short term liquidity operations, SLOS, today-- to hv interest rate of 2.3% - via @Reuters

9.37am BST

Today's losses on the Shanghai markets have rippled across to Hong Kong, where the Hang Seng index closed down 1.5% a few minutes ago.

9.23am BST

This Bloomberg chart show how the Chinese stock market ran out of juice today, after attempting an afternoon rally:

9.12am BST

China has muscled the Greek debt crisis out of the way, to become the biggest issue causing investors sleepless nights:

You could say investors are concerned about China... pic.twitter.com/NuH7LAwBvB

9.09am BST

The boss of luggage maker Samsonite has warned that sales growth to Chinese customers will halve this year, in a sign that the economy is weakening.

China sales are expected to grow 15 to 16% on a local currency basis in the second half of the year and beyond,compared with nearly 30% growth in the first half, Chief executive Ramesh Tainwala said.

"China is an important part of our business but not the only part of our business," Tainwala said, speaking to reporters after the company reported interim results

8.54am BST

My colleague Mark Sweney has more details of Martin Sorrell's views on China:

8.45am BST

One of Britain's top business chiefs, Sir Martin Sorrell, is still "a raging bull" about the Chinese economy.

Be careful what you wish for...China has been the biggest driver of the world economy.

It's been trench warfare, hand to hand combat, it's not been easy.

Interesting interview on @BBCRadio4 today with Martin Sorrell: PBOC have stopped fighting the markets and taken more laid back approach.

8.32am BST

After that late selloff in China, Europe's stock markets have now all shed at least 1.7%.

Nervy start to the European open as the #FTSE drops below 6000. TM pic.twitter.com/fXa7kT6tQm

Looks like yesterday's positive European session may have been the eye of the storm

It's Wall Street's slump ahead of last night's close that appears to be setting the pace for the UK market and as is often the way after these excessive moves, this volatility appears likely to be with us for some time yet.

8.17am BST

China's stock market has fallen again, for the fifth day running, as the market rout continues

*SHANGHAI COMPOSITE CLOSES 1.3% LOWER AS PBOC FAILS TO END ROUT

8.08am BST

European shares are losing ground at the start of the trading day, with fears over China still gripping the City.

Britain's FTSE 100 has quickly shed 90 points, a drop of 1.5%, taking it back below the 6000 point mark to 5991 and wiping out half of Tuesday's recovery.

8.00am BST

Hold onto your (tin) hats. Europe's stock markets are opening....

7.58am BST

Markets have been particularly volatile this week because many investors are still on holiday, meaning less liquidity than usual.

David Buik, a City veteran who has lived through more market crashes than anyone else I know, says "normal working service" will resume next week.

The move by the Chinese authorities attracted considerable adverse criticism not only from the market but also from political heavyweights such as the Japanese Finance Minister, Aso-San, who was not backward in coming forward in implying that last week's devaluation of the Yuan was 'ham-fisted' and unprofessional.

Market observers were also expressing real concern about the robustness of China's banking sector and the potential threat of a major credit crisis. This issue is more acute than China's growth contraction.

7.34am BST

Don't knock that Scottie Dog technical analysis. As feared, China's stock market is shedding its gains in late trading.

And that means Europe's selloff may be more dramatic:

FTSE100 now expected to start -70 at 6011.

7.28am BST

Speaking of unexpected tumbles.....

Sinkhole opens near NE China bus stop, 4 people fall in #XinhuaTV pic.twitter.com/X77aAl2ixz

7.23am BST

We're into the crucial last hour of trading in China. Typically, we've seen sharp moves at the end of the day. Will today be different, or can Shanghai hold onto today's gains?

This 'technical analysis' from FastFT's Patrick McGee shows how the situation could deteriorate from here.....

According to Scottie Dog pattern, Shanghai will see a peak around 2pm and a brisk decline into the close. @frostyhk pic.twitter.com/BPsOd9t8VZ

7.19am BST

Japan's stock market has closed for the day, with the Nikkei rallying by over 3%. That claws back some, but not all, of Tuesday's losses.

Here's the situation across Asia a moment ago:

7.14am BST

Hello all. It's a grey day in London. Dark clouds everywhere, and rain on the way.

Our European opening calls: $FTSE 6057 down 25 $DAX 10028 down 100 $CAC 4531 down 34 $IBEX 10026 down 89 $MIB 21303 down 346

While European markets basked in the afterglow of yesterday's Chinese rate cuts, amidst optimism that we may have seen a base earlier this week, US markets inability to hold onto their gains and sink like a soggy blancmange are likely to see a negative open for Europe this morning, though a rebound in Asia has cushioned some of the effects.

6.51am BST

I'm now handing over the wheel of this live blog to my colleague in London, Graeme Wearden, who will take you through the rest of the day's markets ups and downs. Thanks for reading and for the comments.

6.42am BST

Why has the Shanghai Composite returned from its lunch break in more buoyant mood?

George Chen, managing editor of the South China Morning Post international edition, has some thoughts:

Gov funds are said to be buying large financial stocks, esp state-owned banks, to support index, clear signs of gov intevension - once again

Post-midday V-shape rebounding comes at "good news" incl police arrest of top bankers, financial journalist, following central bank rate cut

6.38am BST

US president Barack Obama held a telephone conversation with Japanese prime minister Shinzo Abe on Wednesday morning, which touched upon economic issues.

Abe's spokesman Yoshihide Suga said the two leaders agreed to work together on global economic issues in the wake of the stock market meltdown sparked by fears over China.

6.30am BST

Shanghai is back from lunch and is having something of a rebound, up around 4%:

6.23am BST

Chris Weston, chief market strategist for IG, says the day's action so far has allowed traders "to catch a much-needed breath":

It still feels as though volatility can break out at any time and a quick 1-2% move in US futures, Nikkei, ASX 200 or Hang Seng could materialise at any time. Of course, these sort of moves will happen when the US volatility index (VIX) is at 36% (over double the year average) and the ASX VIX is at 28% (year average 16%). Things can get dicey quickly "

At the time of writing, stronger buying is being seen in the Chinese equity markets, but price action is fairly whippy. The market has seen through yesterday's 25 basis point cut in benchmark lending rate and the 50 basis point cut to the reserve ratio requirement (RRR). One questions why they didn't ease over the weekend. The extra liquidity injected into the banking system would be somewhere between RMB650 billion and RMB700 billion, which sits nicely with the recent use of shorter-term liquidity tools. Most understand this easing for what it is: a policy move aimed at counteracting the tightening of financial conditions caused by sizeable capital outflows. This is not going to boost growth "

6.15am BST

You can read our latest report on today's market developments here:

6.07am BST

Fergus Ryan sends news from China of police action related to trading - and to the reporting of it:

Following the arrest of a couple of China Securities Regulatory Commission (CSRC) officials - one current and one former - for insider trading and faking documents, Chinese state media is now reporting that a journalist who was covering the agency is being investigated.

Caijing magazine has confirmed that its reporter Wang Xiaolu was summoned by police yesterday in connection with accusations of faking stock news.

5.55am BST

Markets across Asia were holding their breath on Wednesday after early hopes that the worst of this week's turmoil could be behind them were tempered by concern that China has not done enough to stabilise its economy.

A day after China's central bank lowered interest rates in an attempt to ease the crisis, most Asia-Pacific stocks suffered minor losses, while Japan's Nikkei benchmark index mounted a modest comeback after six days of bruising losses.

5.44am BST

A new session high for the Nikkei: up 2.26% to 18.207.37.

The Chinese markers are still on their lunch break.

5.43am BST

Agence France-Presse offers a different perspective on China's struggles - the fate of Swiss luxury watch-makers:

Swiss watchmakers are facing turbulent times in one of their top markets, as the already shrinking luxury sales in China are compounded by the recent devaluation of the yuan.

The move rattled the Alpine country's luxury watchmakers, who have already seen their once booming sales in China take a hit as Beijing began to crack down on corruption in the country by banning extravagant gifts like prestigious watches to public officials.

5.32am BST

News comes in that Malaysian prime minister Najib Razak is to hold a press conference around now on the economy; I'll keep an eye on what emerges from that.

5.28am BST

A glance at some of the global front pages for Wednesday.

The South China Morning Post leads on "stock turmoil" and the bank rate cuts:

Wednesday's front pages of The South China Morning Post. To subscribe, find out more here: http://t.co/h56QweW28k pic.twitter.com/9Yz0f7kAeV

Today's Global Times newspaper (August 26, 2015) http://t.co/kfvJpMeCvW , Mobile version http://t.co/KEdbsl78rs pic.twitter.com/EeqjVeYuGR

Wednesday's International NY Times: Market crash makes nary a sound in state media #tomorrowspaperstoday #bbcpapers pic.twitter.com/QgQ5OLAh4r

Wednesday's FT front page: Beijing cuts interest rates in bid to revive economy #tomorrowspaperstoday #bbcpapers pic.twitter.com/JTwepwAJnf

5.15am BST

As China hit midday, following a rollercoaster morning, the CSI300 index was up 1.7% and the Shanghai Composite Index was up 0.8%.

Still an afternoon to get through, of course "

4.28am BST

A catch-up of this morning's choppy activity, via Reuters:

Asian stocks fell on Wednesday as investors feared fresh rate cuts in China would not be enough stabilise its cooling economy or halt a collapse in its stock markets.

China's key share indexes attempted to move higher several times in early trade only to be slapped back by waves of selling, reflecting investors' views that much more support was needed from the government and the central bank.

In a sign of how fearful investors have become of risky assets, US stock index futures resumed their descent in early Asian trade with the US S&P 500 mini futures down 0.4%, nearing Monday's 10-month low of 1,831.

Overnight, major US stock indexes shot up after China's policy easing but later gave up all their gains, with the S&P 500 ending down 1.4%.

4.14am BST

Glenn Stevens, governor of the Reserve Bank of Australia, has been speaking at an economic reform summit in Sydney - also attended by treasurer Joe Hockey; see here - about the country's economic growth issues, AAP reports.

Stevens said that despite record low interest rates and business and consumer confidence staying around average, economic growth has not been able to get to 3%.

It may be that potential growth is a bit lower than we used to think, though I don't think we can know whether that is so at present.

The fiscal policy debate, usually framed as 'when will we get back to surplus?' is actually about 'how do we get more growth?'

The kind of growth we want won't be delivered just by central bank adjustments to interest rates or short-term fiscal initiatives that bring forward demand from next year, only to have to give it back then.

A key question worth asking is 'how do we generate more growth?' Not temporary, flash-in-the-pan growth, but sustainable growth.

4.01am BST

Japan's main Nikkei 225 stock index ended the morning up 0.5% at 17,896.23, while other Asian stocks fell then rose on what promises to be another unpredictable day of trading.

Hong Kong's Hang Seng index was up 0.2%, while China's benchmark Shanghai Composite index source, the victim of a severe bruising earlier in the week, fell 0.4%.

3.51am BST

Chinese markets have been choppy in early morning trade as investors reacted to a Tuesday evening rate cut from the People's Bank of China, Fergus Ryan reports.

Seventy minutes into trading and shares on the Shanghai composite had fallen -3.32% to 2,866.45 after seesawing all morning.

3.43am BST

And here's that snapshot spelled out.

Within the first 20 minutes of trading today, the Shanghai Composite:

3.34am BST

This snapshot via Google Finance gives an indication of the volatility of the Shanghai Composite in its first hour this morning:

3.29am BST

Meanwhile, Fergus Ryan reports from Beijing, a new survey out today indicates the recent stock market volatility may not be affecting Chinese consumer sentiment.

The Westpac MNI China Consumer Sentiment Indicator rose in August, the third straight month it has done so.

The indicator rose 1.8% for the month - the highest it has been since May 2014.

3.20am BST

China's response on Tuesday to the previous day's precipitous falls had a marked effect on markets yesterday and will no doubt continue to do so today.

The key moves by the People's Bank of China were:

Beijing had the scope to do more to boost confidence after the turmoil of recent days, but has opted for a more measured approach at this stage.

There are reasons for this. Capital has been leaving China at a rapid rate in recent weeks, and a big reduction in interest rates would have provided extra encouragement for investors to take their money elsewhere.

3.11am BST

More on the yuan, set today at its weakest level for four years:

China's yuan weakened early on Wednesday after aggressive monetary easing by the central bank on Tuesday evening.

The People's Bank of China set the midpoint rate at 6.4043 per dollar prior to the market open, its weakest level since August 2011, and firmer than the previous day's closing quote of 6.4124.

3.01am BST

My colleague Fergus Ryan sends this latest from an edgy morning in China:

The central bank's move to ease monetary policy buoyed stocks at the opening of trade on Wednesday, but experts are questioning whether the rally will be durable.

The Shanghai Composite has swung wildly in morning trade but appears to be flirting with the 3000-point mark.

2.54am BST

Taiwan stocks have fallen this morning.

As of 1:40 GMT (that's about 10 minutes ago), the main TAIEX index was off 0.8%, to 7,613.24 points, with the electronics subindex giving up 0.5% and the financials subindex dropping 0.6%, Reuters reports from Taipei.

2.48am BST

Australian prime minister Tony Abbott has said the global economy is not a "one-way escalator", adding that the instability in world stock markets was a correction after "over-exuberance" in the Chinese market earlier in the year, the AAP news agency reports.

"Australians have every reason to face the future with confidence not withstanding the headwinds overseas," Abbott said.

There will be volatility in the markets. There are extraordinary capital flows around the world at the moment, in part linked to speculation about the US federal reserve increasing rates.

Frankly, you've got to see through the volatility and look at the fundamentals and the fundamentals are Australian companies are profitable, they're well run and Australia is in a very good position for the future.

2.42am BST

And then, six minutes into trading:

Shanghai Composite turns negative.

China shares: Shanghai Composite up 0.53% at the open after rate cut, but back in negative territory after 6 mins trade. Long day ahead.

2.39am BST

Reuters files this snap summary from China openings:

China's major stock indexes opened up on Wednesday after aggressive monetary easings announced by the central bank on Tuesday evening following a massive market slide.

The CSI300 index rose 0.7% to 3,062.57 points, while the Shanghai Composite Index gained 0.5% to 2,980.79 points.

2.31am BST

Shanghai composite is up by 0.98% in its first 15 minutes.

2.25am BST

The US dollar has so far avoided any significant drops against the yen, bringing some cheer to Japanese policymakers, who had voiced concern about the Japanese currency's surges earlier in the week.

A weaker yen is a central part of Japanese prime minister Shinzo Abe's quest to boost profits for his country's auto and consumer electronics manufacturers. A strong yen, however, eats into exporters' profits once they are repatriated from overseas.

2.20am BST

Will no one think of the billionaires?

Bloomberg says 24 billionaires saw their wealth fall by more than $1bn on China's Black Monday.

2.11am BST

Reuters reports from Manila that gold has edged up this morning following its biggest drop in five weeks, as global equities were revived after China cut interest rates and bank reserve requirements to support a flagging economy.

But China's move appears to have only boosted equities temporarily, with US stock futures resuming their descent and Asian shares slightly lower. Further losses in equities could switch appetite back to safe-haven assets such as gold.

2.05am BST

Meanwhile, back to China, where all is rosy, according to Xinhua, the state's official news agency:

Despite the tumbling of stock markets, investors should forgo their unnecessary anxiety over China because the long-term prediction for China's economy still remains rosy and Beijing has the will and means to avert a financial crisis.

The plunge of stocks, the depreciation of China's currency and its slowing growth pace after years of high-speed development have all put a question mark on the health of the world's second largest economy.

2.00am BST

Here's a reminder of how things looked from the US at the close of Tuesday, with the Nasdaq, the Dow and the S&P 500 all down at the closing bell:

1.54am BST

And the Guardian's Justin McCurry sends this from Tokyo:

More volatility has hit Japanese stocks this morning, after further losses on Wall Street, a rate cut by China's central bank and a rebound in European stocks.

In the first 15 minutes of trading in Tokyo, the Nikkei fell 39.6 points, or 0.22%, following a drop of nearly 4% on Tuesday.

1.51am BST

My colleague Tom Phillips sends this update from Beijing:

This what China's Global Times newspaper has to say this morning about the country's week of stock market chaos and what it tells us about the wider economy.

The Asian stock market followed the fall of the Chinese stock market on Monday, but surged yesterday. This shows that the outside came to realise that the Chinese stock market and the economy are not closely related.

The crash has made many people lose heart, but a severe financial or social impact may not come soon.

1.44am BST

Markets in Seoul are open, with the Korea Composite Stock Price Index (Kospi) dropping a little in the first 15 minutes of trading: down 0.45 points (0.02%) to 1,846.18.

Samsung Electronics fell 1.48% and Shinhan Financial Group slid by 2.11%, the Yonhap news agency reports.

1.36am BST

With the Asian markets set to open shortly following days of turmoil, we will have live coverage here of the latest twists and turns.

Tuesday saw world markets continue to seesaw after China's Black Monday. As my colleague Dominic Rushe reports from New York:

The Dow Jones industrial average initially appeared to be bouncing back from "Black Monday" - a day when it crashed more than 1,000 points before ending the day down 586 points.

By noon the Dow was up over 300 points as European markets closed up and investors reacted positively to China's decision to cut interest rates. But the Dow closed 205 points down, or 1.29%. The S&P 500 ended the day down 25 points, 1.34%, and the Nasdaq closed 0.39% down.

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