Equity markets in China hurled themselves back above the flatline late Wednesday, while other regional bourses mostly declined on the back of renewed fears over the stability of the world's second-biggest economy.
In the previous trading session, the Shanghai bourse closed down 6.1 percent in its biggest daily decline since July 27, as traders pared back their bets for more stimulus following the release of upbeat data that hinted at a bottoming out in the mainland's crucial property sector. Concerns over the yuan and liquidity in the economy also fueled jittery sentiment.
"Markets are still watching [the yuan] given the surprise last week. People are still waiting to see how deep the depreciation will go," William Ma, CIO of Gottex Fund Management, told CNBC Asia's "Squawk Box." The People's Bank of China (PBOC) set the midpoint rate at 6.3963 per dollar prior to the market open, a touch weaker than Tuesday's close of 6.3938.
Meanwhile, IG's market strategist Bernard Aw said: "Indicators of Chinese liquidity such as the offshore CNY one-year interest rate swap and one-week Shanghai interbank rate have been steadily rising, suggesting tighter credit conditions. As a corollary, the PBOC injected 120 billion yuan worth of seven-day reverse repo into the money market, the largest cash infusion in nearly 19 months. This signaled Beijing's mounting worries about capital outflows."
Major U.S. indices declined overnight, weighed down by earnings-related selling in Wal-Mart and a drop in commodity names due to concerns over the mainland economy. The tech-heavy Nasdaq led losses with a drop of 0.64 percent, while the Dow Jones Industrial Average and S&P 500 closed down 0.19 and 0.26 percent, respectively.