BEIJING — Black Monday. Terrible Tuesday. Wobbly Wednesday. And that's just so far this week in China.
China’s Shanghai Composite dropped 1.3 percent Wednesday after a volatile day of trading and the smaller Shenzhen Composite Index fell 3.1 percent. The Shanghai index swung wildly during trading, falling nearly 4 percent in the morning, before rising more than 4 percent, before closing down.
Other Asian stock markets also zigzaged throughout the trading day. Hong Kong's Hang Seng Index veered between gains and losses, finally closing down 1.52 percent. Other Asian markets rebounded, slightly, with Japan's Nikkei Stock Average finishing up 3.2 percent and South Korea's Kospi rising 2.6 percent by day's end.
In an effort to stop China's wildly swinging stocks and support the economy, China's central bank cut its benchmark interest rate and freed banks to lend more Tuesday.
The move temporarily buoyed a comeback in U.S. markets, which was erased, however, in the last hour of Tuesday trading.
But it evidently failed to calm nerves in China, where nervous investors appear to be waiting for more direction from Beijing.
"In the space of hours, for stocks to move around in that type of range, that clearly suggests people are directionless in terms of what is going to happen next," said Evan Lucas, market strategist at IG in Melbourne, Australia, Wednesday.
The central bank moves followed several days of steep declines in Chinese markets. On Tuesday, Shanghai’s main index dropped 7.6 percent , building on steep losses Monday that pulled down markets around the world.
The rout has raised questions about the Chinese government's approach to handling equity markets, as well as the health of the economy as a whole, with investors and analysts outside of China adopting a far more bearish view.
Some now say that may have led to an over-correction in global markets, as investors read mayhem in China’s highly volatile stock markets as a signal of what is happening in the economy as a whole.
"I think there has been an exaggerated fear because people don’t follow what is happening, and they see stock markets and extrapolate to something about China having a hard landing," said Wang Tao, UBS’s Hong Kong-based chief China economist.
"There has been little new information in the last few weeks to suggest that things are getting worse, other than the market being allowed to correct itself."
That correction, though comes as something of a surprise. When Shanghai and Shenzhen markets climbed to historic heights this spring, only to crash by summer, Chinese authorities took extraordinary measures: forcing big investors to buy stocks, and prohibiting some from selling.
In the last week, though, the government has taken a more hands-off approach : four days of sharp losses saw no large-scale buying by the China Securities Finance Corp, leaving investors wondering if the days of state share-buying are over for now.
"The market self-adjustment is a good thing," JP Morgan economist Haibin Zhu told the Associated Press. "The positive sign is the 'national team' no longer intervenes and keeps buying, which was causing market distortion."
"It's difficult to manage all their objectives at the same time," he said. "I would say the stock market decline is the least important among all of them."
Still, it seems, they need some scapegoats.
Authorities Tuesday announced an investigation of market malpractice at a state regulator. Xinhua, the state-controlled newswire, published a comment from a central bank researcher who blamed the worldwide market turmoil on the Federal Reserve rate cut.
Chinese authorities, meanwhile, have moved to assure investors that despite the ongoing volatility, and their failed efforts to stop it, the economy is sound.
"Currently, global economic trends are opaque and confusing, and market volatility is quite large, and this has had some impact on the Chinese economy," Premier Li Keqiang said at a meeting on Tuesday, according to Chinese media reports.
"But fundamentally the overall stability of the Chinese economy has not changed, and positive factors sustaining a turn for the better in the real economy are accumulating."
Emily Rauhala is a China Correspondent for the Post. She was previously a Beijing-based correspondent for TIME, and an editor at the magazine’s Hong Kong office.
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