Chinese stocks jumped several minutes after trade opened in the afternoon session on Wednesday, with the benchmark Shanghai Composite Index up more than 3 percent.

In the morning session, Chinese shares continued to fluctuate despite intervention by the central bank, reported Xinhua.

The benchmark Shanghai Composite Index opened slightly higher before suffering a bout of jitters to dip below 2,900 points. It then rebounded to close the morning session 0.8 percent higher at 2,988.76.

The smaller Shenzhen Component Index edged up 0.02 percent to 10,200.38 points.

On Tuesday evening, the People's Bank of China (PBOC) cut interest rates for one-year lending and deposits by 25 basis points, and announced a reduction of the reserve requirement ratio (RRR), the portion of money banks need to set aside.

This is the fourth RRR reduction in nearly seven months, and the fifth round of interest cuts in nearly nine months.

The central bank said the move was aimed at supporting the real economy amid downward pressure on growth and fluctuations on global financial markets.

Chinese stocks have tumbled in the past week following the release of weak economic data and a depreciation of the yuan, with the benchmark Shanghai index diving 8.49 percent on Monday in its biggest daily slump since February 2007.

Japanese stocks rebound sharply

Japanese stocks rose 3.20 percent on Wednesday after days of steep losses.

The 225-issue Nikkei Stock Average was up 570.13 points, from Tuesday at 18,376.83, reported Xinhua news agency.

The broader Topix index of all first section issues on the Tokyo Stock Exchange finished 46.32 points (3.23 percent) higher at 1,478.97.

Every industry category on the main section advanced, with utilities, insurance and miscellaneous products leading gainers.

The turnover was 3,800.02 billion yen (about $31.83 billion).

Germany's benchmark DAX index rebounds

The benchmark DAX index at Frankfurt Stock Exchange rebounded and advanced by nearly five percent.

The index rebounded on Tuesday after it lost nearly 500 points on Monday, reported Xinhua.

The blue-chip index opened higher and went all the way up and closed by 479.69 points (4.97 percent). It closed at 10,128.12 points.

The central bank of China on Tuesday cut the reserve requirement ratio (RRR) and lower key interest rates.

According to the German business daily Handelsblatt, China's move boosted the confidence of investors and brought the DAX index up.

All the 30 DAX member shares went up with Infineon Technologies AG, a semiconductor producer taking the lead. It gained 9.67 percent.

Deutsche Telekom AG rose by 6.41 percent. BMW AG St advanced by 6.36 percent. Deutsche Bank AG added 6.23 percent. SAP SE went up by 5.92 percent.

The turnover stood at 7.77 billion euros (around $8.93 billion). Daimler AG was the most traded share of the day with a turnover of 690.27 million euros (around $793.34 million).


Spanish stock market up 3.68 percent

Spanish stock market index Ibex-35 rose 3.68 percent to close at 10,115.40 points.

The index was up from the 9,756.60 points of Monday when it registered the biggest fall since August 2012.

On Tuesday, Abengoa "B" shares led the rise, climbing 26.61 percent, followed by Gamesa, OHL, IAG, Tecnicas Reunidas and Inditex which rose 9.49 percent, 8.55 percent, 5.90 percent, 5.50 percent and 5.18 percent respectively, Xinhua reported.

Endesa shares climbed 0.25 percent, followed by Gas Natural, Acerinox, Bankia and Grifols at 0.89 percent, 1.16 percent, 1.47 percent and 1.74 percent respectively.

Meanwhile, Spain's risk premium stood at 138.60 points on Tuesday's close, six points down from Monday, and Spain's 10-year bond interest rate stood at 2.1 percent, showing no big difference from Monday.


US stocks drop

However, US stocks erased early rebound in the final section of trading on Tuesday.

The Dow Jones Industrial Average surged 2.42 percent, the S&P 500 gained 2.48 percent, the Nasdaq Composite Index spiked 3.39 percent, Xinhua reported.

Wall Street was cheered by China's central bank announced a cut in the reserve requirement ratio (RRR) and lower key interest rates, describing this as "promoting restructuring" to "stabilise the real economy".

US sales of new single-family houses in July were at a seasonally-adjusted annual rate of 507,000, said the Commerce Department on Tuesday.

US consumer confidence for August came in at 101.5, up from 91.0 in July, according to the New York-based research group Conference Board on Tuesday.

The Dow tumbled 204.91 points (1.29 percent) to 15,666.44, the S&P 500 shed 25.6 points (1.36 percent) to 1,867.61, and the Nasdaq Composite Index sank 19.76 points (0.44 percent) to 4, 506.49.