SINGAPORE, Oct 9 (Reuters) - Chinese shares fell on Wednesday as investors tempered their enthusiasm for a Chinese economic recovery, while broader markets steadied on expectations that the U.S. economy can avoid recession and support global demand.
The New Zealand dollar dropped 0.6% after the central bank cut interest rates by 50 basis points and expressed a pessimistic outlook on the economy, indicating the possibility of further cuts.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6% as Hong Kong shares rebounded by about 2% following a significant decline the previous day.
On Tuesday, Hong Kong markets experienced their heaviest fall since 2008, while mainland shares also dropped, and commodities such as oil and metals saw sharp losses after a news conference from China's National Development and Reform Commission failed to provide new stimulus details.
The Shanghai Composite and blue-chip CSI300 both slumped around 3% on Wednesday. Brent crude futures, which had fallen 4.6% overnight, steadied at $77.79 a barrel, while iron ore found support at $106 in Singapore after a 5% slide on Tuesday.
Mizuho's head of macro research for Asia ex-Japan, Vishnu Varathan, noted that the disappointment regarding the lack of stimulus details seemed premature and misguided.
In Japan, the Nikkei rose 1%, driven by gains in convenience store Seven & I Holdings after reports of a potential buyout offer.
U.S. equity futures remained steady in Asia, following solid gains in cash trade overnight, as several Federal Reserve officials expressed optimism about managing interest rate levels for a soft economic landing. New York Fed President John Williams highlighted the healthy state of the economy following a strong jobs report for September.
The U.S. dollar gained support from higher yields, trading at $1.0968 per euro and 148.25 yen. The Australian dollar weakened slightly, while the New Zealand dollar traded at a seven-week low.
Expectations regarding future rate cuts by the Federal Reserve have adjusted, with traders currently pricing in an 88% chance of a 25 basis point cut.
Reporting by Tom Westbrook; Editing by Jacqueline Wong