China's runaway rally stutters, global shares subdued

China's runaway stocks rally has stuttered and commodities have struggled to find a footing as investors tempered their expectations for a robust Chinese economic recovery, keeping pressure on shares globally.

Benchmark indices in China on Wednesday notched up their biggest daily losses since the COVID-19 pandemic began, with stocks in Shanghai and blue-chips closing down 6.6 per cent and 7.1 per cent respectively, snapping a 10-day winning streak, and Hong Kong's benchmark sliding 1.5 per cent.

China's surging markets had turned suddenly fragile a day earlier, with commodities from oil to metals falling, when a news conference from China's National Development and Reform Commission yielded no major new stimulus details.

Investor attention will now turn to a news conference by China's finance ministry scheduled for Saturday, which will detail plans on fiscal stimulus to boost the economy, signalling more forceful policies to revive growth.

Markets are looking for a spending package between two trillion and 10 trillion yuan ($A420 billion to $A2 trillion).

Nick Ferres, chief investment officer at Vantage Point Asset Management, said support needed to be on top of previous commitments and boost GDP by about two percentage points to be helpful.

Still, other market players said there were some reasons for optimism.

"If you take the whole picture, you still see a trend, which is domestic stocks are faring a bit better - an indication for foreign investors that the stimulus is good news for China's economy," Alexandre Marquis, senior portfolio manager at asset manager Unigestion, said.

MSCI world equity index, which tracks shares in 47 countries, fell 0.2 per cent on Wednesday.

The uncertain mood spilled into European trading, with the continent's stocks squeezing out gains of 0.1 per cent.

The utilities, healthcare and real estate sectors - considered as a safer bet during times of uncertainty - were in demand.

Commodities, the fate of which are tied to China's economy, were also under pressure.

Dalian iron ore and Shanghai copper posted losses, while Brent crude futures, which fell 4.6 per cent overnight, steadied at $US77.89 a barrel.

Elsewhere, Japan's Nikkei rose one per cent.

Traders have so far regarded China's stocks slide as an overdue pullback after a hefty 25 per cent surge in the previous six sessions.

Just about every sector was down in China.

Property and tourism were heavily beaten-down in a sign of doubts that state support will be large and swift enough to turn around consumers' confidence.

The direction of US interest rate cuts was also in focus, investors said.

Minutes from the US Federal Reserve's September meeting - where US rates were cut 50 bps - are due on Wednesday, along with appearances from the Fed's Raphael Bostic, Lorie Logan and Mary Daly.

Market expectations of Federal Reserve rate cuts have been pared back following strong labour market data last week, lifting yields and the dollar.

That backdrop saw a 0.9 per cent slide for the New Zealand dollar in the Asia session, with the kiwi falling to a seven-week low after the central bank cut interest rates by 50 basis points and left the door open to more.

The dollar was up 0.2 per cent against the Japanese yen at 148.535 yen, and at $US1.096 per euro.