US markets down at closing bell after midday rally as China woes …

What a busy 12 hours we’ve had. And with America waking up, let’s have a recap.

China’s central bank has slashed interest rates and allowed its banks to lend more money, in an attempt to prop up its economy.

The stimulus move, which has driven shares higher worldwide, came after another day of heavy losses in Asia.

In an unscheduled move, the People’s Bank of China cut lending rates, and deposit rates, by 0.25 percentage points. It also cut the Reserve Ratio Requirement, a move which should increase liquidity in the economy.

PBoC warned that the China’s economy still faces downwards pressure, as it pledged to use the tools at its disposal to maintain liquidity levels.

Economists say the move is meant to help China hit its growth targets, and also stem the panic that has gripped markets for days.

Investors in Europe hailed the move, sending the main indices surging over 4% at one stage.

Here’s the state of play now:

FTSE 100: up 172 points, or 3%, at 6072
German DAX: up 396 points or 4.1%, at 10044
French CAC: up 191 points or 4.3%, at 4574

Wall Street is expected to rally strongly when trading begins in an hour’s time. Last night, the Dow Jones suffered its biggest one-day fall in four years, adding to recent losses this month:

The PBoC’s action came too late to prop up share prices in China today, where the Shanghai composite index plunged by another 7.6% to its lowest point since last December.

Analysts believe that Beijing has given up supporting the stock market directly, leaving shares free to find their own level.

Japan’s Nikkei fell another 4% to an 18-month low, in a day of wild swings in Asia.

The selloff left “even the most hardened trader gasping for air”, says Frederic Neumann, HSBC’s co-head of Asian economics research team.

And there were grim faces across Beijing’s trading floors again, where investors spoke to The Guardian about the ‘horrible’ crash.

A stock brokerage house in Fuyang city, east China’s Anhui province, today. Photograph: Imaginechina/REX Shutterstock/Imaginechina/REX Shutterstock

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US markets down at closing bell after midday rally as China woes …