Nervous markets ride roller-coaster after China rate cut

Shanghai

European markets joined Asia on a roller-coaster session Wednesday, as China's interest rate cut showed no sign of ending a crisis fuelled by fears over stalling growth in the world's number-two economy.

Frazzled investors sent Europe's top indexes falling by more than one percent in opening trade after a choppy session on Asian bourses, and analysts predicted more turbulence ahead.

China's central bank reduced interest rates and slashed the amount of money banks need to hold in reserve on Tuesday its second such double move in two months in a bid to stoke growth.

The measures are not only aimed at boosting boost cash flow in China, but also to revive confidence that Beijing can steer the economy away from a hard landing and keep global growth on course.

The cuts initially fuelled a rebound in Europe but optimism fizzled by the end of US trading, and on Wednesday Asian markets see-sawed in nervous trade."The struggle between gains and losses suggests that the market doesn't really know what to make of the policy move yet," Bernard Aw, a strategist at IG Asia, told Bloomberg News.

China's benchmark stock index fell 1.27 percent, or 37.68 points, to 2,927.29, after a day that saw it veer wildly from between losses and gains of around four percent.

Other Asian shares were mixed, with Tokyo surging 3.20 percent, Seoul closing up 2.57 percent and Sydney adding 0.69 percent, while Hong Kong followed Shanghai down to close 1.52 percent lower.

"The equity market roller-coaster continues," said TrustNet analyst Tony Cross as  Frankfurt, Paris and London all lost ground after Tuesday's strong gains.

"It's Wall Street's slump... 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."