China's highly-volatile Shanghai Composite index finished in negative turf late Wednesday, underperforming most of Asia's stock markets, as investor confidence remained frail despite fresh monetary stimulus.
The People's Bank of China (PBOC) fired a double-barreled easing shot late Tuesday—lowering interest rates by 25 basis points and the reserve requirement ratio (RRR) for most big banks by 50 basis points.
This followed a brutal multi-day sell-off in its domestic equity markets that has sent shockwaves around the world. China will also restrict trading in stock index futures, a statement from the China Financial Futures Exchange said, as regulators step up their efforts on curbing speculation.
However, there are analysts who feel that more aggressive action may be needed to prop up the slowing economy and shore up share prices.
"Clearly a cut [in] the interest rate and RRR is helpful, but [with] people still overly concerned about the economy, this relaxation in monetary policy may be coming in a bit too late because the sentiment is worsening," Pu Yonghao, partner and CIO at Fountainhead Partners, told CNBC. "On top of that, we are seeing massive capital outflow which is shrinking the capital base so cutting RRR is just a way to offset the money that left China, but the money injected into the system is less than market expectations," he added.
The rollercoaster ride in many Asian bourses on Wednesday also tracked the dramatic trading session on Wall Street overnight. The blue-chip Dow Jones Industrial Average and S&P 500 finished about 1.3 percent lower after rallying near 3 percent earlier, marking their biggest reversal to the downside since October 2008. The S&P 500 remained in correction territory.
Meanwhile, the tech-heavy Nasdaq Composite closed down 0.4 percent.