TOKYO — Asian stocks were mixed Wednesday after China's decision to cut its key interest rate failed to spark a sustained rally on Wall Street, bringing on another white-knuckle day as Chinese, Hong Kong and Japanese markets bobbed in and out of negative territory.
China's benchmark Shanghai Composite Index — the source of much angst during these days of volatility — fell by 3.6 percent in early trading but bounced back to gain 0.8 percent to 2,988.76 by the midday break. Japan's main Nikkei 225 stock index climbed 1.3 percent to 18,032.65 while Hong Kong's Hang Seng index was up and down, losing 0.3 percent to 21,337.62.
Markets have been gyrating for weeks as fears snowballed over the potential impact of slowing growth in China, the world's second-largest economy and the driver of much of global growth over the past decade.
Plunging share prices in China, and the apparent inability of regulators there to stabilize the markets, have spooked investors already fretting over when the U.S. Federal Reserve will raise interest rates.
"Asia remains the epicenter of the current market instability," Evan Lucas of IG said in a market commentary, noting that fears of a reoccurrence of past crises may be overblown due to today's stronger financial systems and currency reserves across the region.
"Market 'stability' will then come from this region — however the slide in China and Japan suggest sentiment is ruling price action and hyper-fear trading is still in control," he said.
Elsewhere in Asia, Australian shares fell 0.5 percent to 5,110.50, but South Korea's Kospi rose 1.7 percent to 1,877.89. Shares in rose in Taiwan but fell in New Zealand and most of Southeast Asia.
Overnight, a rally in U.S. stocks evaporated just minutes before the closing bell Tuesday, sending the Dow Jones industrial average down 204.91 points, or 1.3 percent, at 15,666.44 and extending Wall Street's losing streak to six days — the longest such stretch in more than three years.
U.S. shares had surged after China cut its interest rates for the fifth time in nine months in a renewed effort to shore up growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.
Global markets ran with the news out of Beijing, with European shares climbing sharply higher, and for a while it looked as if U.S. stocks would follow suit and the global sell-off might stop. The Dow gained as much as 441 points on Tuesday before succumbing to selling just before the close.
By the day's end, the Standard & Poor's 500 index was down 25.60 points, or 1.4 percent, to 1,867.61 while the Nasdaq composite lost 19.76 points, or 0.4 percent, to 4,506.49.
The People's Bank of China acted after the Shanghai stock index slumped 7.6 percent on Tuesday, on top of an 8.5 percent loss on Monday.
China's slowdown is crimping demand for oil and other commodities, a ripple effect that already is slowing exports and other business activity across Asia.
Beyond China, traders are waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. The Fed isn't expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.
In other trading, U.S. crude oil rose 26 cents to $39.57 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.07, or 2.8 percent, to $39.31 on Tuesday. Brent crude oil, which is used to price international trading, gained 19 cents a barrel to $43.40.
The dollar rose to 119.30 yen versus 118.66 yen late Wednesday. The euro slipped to $1.1513 from $1.1524.
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AP Business Writer Alex Veiga in Los Angeles contributed.