Global equity markets went on another roller coaster ride today as China's interest rate cut showed little sign of calming jitters over the country's faltering economy.
Europe's main stock markets fell, with London's benchmark FTSE 100 index shedding 1.68 per cent to close at 5,979.20 points.
In the eurozone, the CAC 40 in Paris dropped 1.4 per cent to end at 4,501.05, points, and Frankfurt's DAX 30 fell 1.29 per cent to 9,997.43 points.
But US stocks surged higher as investors tried to snap a six-day losing streak prompted by the turmoil in the Chinese stock market.
In mid-morning trade, the Dow Jones Industrial Average stood at 15,854.51, up 1.2 per cent on new US data showing that orders for durable goods rose a solid two percent in July.
The broad-based S&P 500 rose 2.07 per cent to 1,906.26, while the tech-rich Nasdaq Composite Index gained 2.15 per cent at 4,603.53.
Frazzled investors sent Europe's top indices swinging between losses and gains after a choppy session on Asian bourses, and analysts predicted even more turbulence ahead.
China's central bank had yesterday reduced interest rates and slashed the amount of money banks need to hold in reserve -- its second such tandem move in two months -- in a bid to stoke growth.
The measures are not only aimed at boosting cash flow in China, but also at reviving confidence that Beijing can steer the economy away from a hard landing and keep global growth on course.
China's slowdown has cast a dark shadow over markets because the Asian powerhouse represents around 15 per cent of global economic activity -- and it is a top consumer of many commodities.
Analysts at the Capital Economics think tank said the worst may be over.
"Looking ahead, we... Suspect that investors will be less worried about China in due course, as it becomes apparent that her economy is not collapsing," they wrote in a note to investors.
China's benchmark stock index fell 1.27 per cent to 2,927.29 points today, after veering wildly between losses and gains of around four per cent during the day.
Other Asian shares were mixed, with Tokyo rising 3.20 per cent, Seoul closing up 2.57 per cent and Sydney adding 0.69 per cent, while Hong Kong followed Shanghai down to close 1.52 per cent lower.
"The equity market roller coaster continues," said TrustNet analyst Tony Cross as Frankfurt, Paris and London were down between 0.25 per cent and one per cent in mid-afternoon trades after yesterday's strong gains.
"We're still seeing some big market swings today... (but) the rate cut from (China's) central bank was clearly not enough to put investors' concerns at ease," said Craig Elam, senior market analyst with trading firm Oanda.
Chinese stocks have lost more than 40 per cent of their value since a year-long, debt-fueled rally collapsed in June, prompting Beijing to unleash unprecedented market support measures, including using state-backed vehicles to buy up shares.
The new plunge in Chinese stocks sparked pandemonium on Monday, wiping about USD 2.7 trillion off global equities from London to Buenos Aires.
