Chinese shares declined on Wednesday, and commodities experienced significant losses as investors moderated their optimism regarding a recovery in China's economy. In contrast, broader markets stabilized on the belief that the U.S. economy can sidestep recession and support global demand.

The New Zealand dollar dropped by 0.6% after the central bank reduced interest rates by 50 basis points and expressed a pessimistic outlook for the economy, suggesting the possibility of further cuts.

The MSCI index tracking Asia-Pacific shares outside Japan rose by 0.6%, with Hong Kong shares rebounding approximately 2% after experiencing their largest decline since 2008 the previous day.

On Tuesday, Hong Kong markets plummeted, mainland shares retreated from their highs, and commodities, including oil and metals, faced declines after a news conference by China's National Development and Reform Commission (NDRC) provided no substantial new stimulus information.

The Shanghai Composite and blue-chip CSI300 indexes fell by about 3% on Wednesday.

Brent crude futures, which dropped by 4.6% overnight, steadied at $77.79 per barrel. Iron ore found support at $106 in Singapore following a 5% decrease on Tuesday.

Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho, noted in a client memo that the market's disappointment was premature and misplaced. He emphasized that it is not the NDRC's role to outline fiscal stimulus or additional monetary policy measures.

In Japan, the Nikkei index rose by 1%, driven by a surge in shares of convenience store Seven & I Holdings after Bloomberg News reported that Canadian retailer Alimentation Couche-Tard would increase its buyout offer.

In the U.S., equity futures remained relatively stable in Asia, following solid gains in cash markets overnight. This stability came after several Federal Reserve officials expressed optimism about achieving a soft economic landing while managing interest rates.

New York Fed President John Williams mentioned to the Financial Times that the unexpectedly strong jobs report for September indicated a healthy economy, while decreasing inflation provided the opportunity for gradual rate reductions.

Traders adjusted their expectations regarding the Fed's potential to cut rates by 50 basis points in November, with current pricing reflecting about an 88% likelihood of a 25 basis point cut.

U.S. Treasury yields steadied after recent declines, with two-year yields at 3.96% and 10-year yields at 4.01%.

The U.S. dollar gained support from rising yields, trading at $1.0968 against the euro and holding steady at 148.25 yen. The Australian dollar weakened slightly to $0.6738 as traders anticipated further cuts from the Reserve Bank of New Zealand.

The kiwi was trading at $0.6096, reaching a seven-week low and testing its 200-day moving average. IG Markets analyst Tony Sycamore commented that while the Reserve Bank of New Zealand’s meeting did not include updated forecasts or a press conference, the dovish tone of the decision statement allowed for the possibility of additional rate cuts before the year's end.

Minutes from the Federal Reserve's September meeting, which included a 50 basis point rate cut, are expected later in the session, alongside comments from Fed officials Raphael Bostic, Lorie Logan, and Mary Daly.

Paraphrasing text from "Reuters" all rights reserved by the original author.