Chinese stocks recovered from sharp losses after a roller-coaster ride Wednesday. The benchmark Shanghai Composite Index had dropped 4%, before settling at 3,160.17, 0.2% down from the previous close.

Another wild day of trading gripped Wall Street Tuesday. Many were hoping stocks would recoup losses from Monday's massive selloff, as all three major equity indexes surged during early sessions. But, as trading drew to a close, their gains vanished.

China is reportedly planning to cut deposits that banks are required to hold in reserve to counter the effects of a weaker currency.

Can $500 billion restore normalcy in Chinese stock market? China's stock market capitalization melts by $3-trillion as equities crash 30% in less than a month while State-owned banks step in with buying support. Technical charts indicate further fall and economy slowdown becomes a major concern.

China's stock markets may be facing a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that could threaten the world's second-largest economy.

European stocks fell on Wednesday, failing to extend an overnight rally in Asia as investors looked to Greece's debt crisis and lurch towards possible default as an excuse to cash in gains chalked up earlier in the week.

Investors seemed not receptive to the Chinese government's announcement to resume the initial public offerings by the first month of next year.

Bernanke's testimony caused world stock markets to waver between gains and losses. The testimony of US Federal Reserve Chairman Ben Bernanke made investors cautious.