China's central bank cut interest rates and lowered the amount of reserves banks must hold for the second time in two months on Tuesday, ratcheting up support for a stuttering economy and a plunging stock market that has sent shockwaves around the globe.
U.S. stock futures resumed descent in early Asian trade and Asian shares were seen on the defensive on Wednesday as monetary easing by China's central bank had limited success in cheering up nervous investors. U.S. S&P 500 mini futures fell 0.7 percent to 1,858.75, edging closer to Monday's 10-month low of 1,831. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent while Japan's Nikkei was flat in early trade, with the focus on the Chinese share markets' reaction to the latest stimulus.
The CBOE Market Volatility Index, at 36, was still elevated, indicating significant uncertainty, even though it was below the previous day's peak of 53.3, which was the highest level since January 2009. In the currency market, the dollar also lost steam as traders flocked to save-haven currencies such as the euro and yen.
The euro was $1.1529, little changed from late U.S. trade, but more than a full cent above Tuesday's low of $1.1396. The dollar also slipped back to 118.90, failing to maintain its brief foray above the 120 mark. NZD/USD traded at 0.6485, up 0.19%. AUD/USD traded at 0.7121, down 0.11%, while USD/JPY changed hands at 118.94, up 0.08%.
Emerging market currencies remained under pressure, with the Brazilian real falling 1 percent to a fresh 12-year low of 3.59 per dollar as investors worried about a deep economic recession and a growing political crisis in Latin America's largest economy.
Commodity prices managed to hover a tad above multi-year lows hit earlier in the week, but concerns about lower demand from China could lead to oversupply kept a tab on them. Brent crude futures last traded at $43.36 per barrel, about a dollar above 6.5-year low of $42.23 touched on Monday. The price of copper, often considered a proxy for global economic activity because of the metal's extensive use, rose 2.3 percent to $5,065 per ton.