Asian shares wobble after China rate cut

Asian stocks flip-flopped on Wednesday after China cut interest rates in a bid to restore confidence in its sagging economy, with trading volatile after days of heavy swings across world equities.

The dollar edged up in Tokyo, after rebounding from this week's steep losses in New York as nervous investors searched for safety.

Tokyo rose 0.40 percent by the break, bouncing after their worst two-day plunge since 2011, and Seoul added 1.05 percent as China's move to cut rates and free up cash for banks to lend spurred optimism.

But Shanghai swiftly gave up gains in opening deals to fall 3.03 percent by mid-morning, and Hong Kong and Sydney both dropped 0.70 percent.

China on Tuesday cut its key interest rate and slashed the amount of money banks must hold in reserve for the second time in as many months in a bid to spur growth and end its worst stock market rout in decades.

The People's Bank of China has already cut interest rates five times since November to spur the slowing economy as concerns mount it may miss its seven percent growth target for the year.

Fears of stalling growth in China, the world's number two economy and key driver of world growth, has sent global markets into a tailspin and investors said the cuts alone may not be enough to stem the losses.

"The authorities have not been intervening, they have been allowing stocks to go down in price. Assuming that continues to be the case on Wednesday, I do see a continued fall in prices," Komal Sri-Kumar, founder of Sri-Kumar Global Strategies, told Bloomberg News.

In currency trade, the dollar remained under pressure at 118.96 yen, little changed from 118.84 yen in New York trade Tuesday, but dramatically weaker than the 122.06 yen seen in US trade on Friday.

The euro stood at $1.1535 and 137.25 yen in Tokyo, compared with $1.1518 and 136.87 yen in New York overnight.

Oil prices held steady ahead of the latest US energy report after heavy losses earlier in the week owing to jitters over China's faltering economy.

US benchmark West Texas Intermediate for October delivery gained four cents to $39.35 while Brent crude for October rose 11 cents to $43.32.

Gold traded at $1,137.66 compared to $1,149.80 late Tuesday.

In individual shares, BHP Billiton rose 0.81 percent to Aus$23.54 after the global mining giant announced a 86.2 percent slump in annual net profit after trading closed Tuesday.