China´s benchmark stock index fell 1.27 percent to 2,927.29 points on Wednesday, after veering wildly between losses and gains of around four percent during the day.
Other Asian shares were mixed, with Tokyo rising 3.20 percent, Seoul closing up 2.57 percent and Sydney adding 0.69 percent, while Hong Kong followed Shanghai down to close 1.52 percent lower.
"The equity market rollercoaster continues," said TrustNet analyst Tony Cross as Frankfurt, Paris and London were down between 0.25 percent and one percent in mid-afternoon trades after Tuesday´s strong gains.
"We´re still seeing some big market swings today... (but) the rate cut from (China´s) central bank was clearly not enough to put investors´ concerns at ease," said Craig Elam, senior market analyst with trading firm Oanda.
Chinese stocks have lost more than 40 percent of their value since a year-long, debt-fuelled rally collapsed in June, prompting Beijing to unleash unprecedented market support measures, including using state-backed vehicles to buy up shares.
The new plunge in Chinese stocks sparked pandemonium on Monday, wiping about $2.7 trillion off global equities from London to Buenos Aires.
Some analysts see Beijing´s handling of the market slump as a further test of the government´s ability to guide the economy to a more market-oriented model after the shock devaluation of the yuan two weeks ago.
"If problems on China´s financial markets and real economy deepen, and the authorities fail to contain the situation, a full-blown financial and economic crash in China could ensue," said Christophe Donay, chief strategist at Pictet Wealth Management.
"This is currently the biggest risk for the global economy and financial markets." The People´s Bank of China cut its benchmark lending and deposit interest rates by 0.25 percentage points each, and its reserve requirement ratio by 0.50 percentage points.