The prospects of higher rates supported the dollar against most other currencies.

The Chinese currency has remained stable this week following Beijing’s move last week to devalue its tightly controlled yuan.

Emerging-market currencies fell, extending the longest stretch of weekly declines since 2000, as Malaysian assets tumbled, Turkey’s lira touched a record low for a third day and the ruble and Russian stocks retreated with oil.

But state-backed buyers later rushed in, enabling stocks to finish the day more than 1 per cent higher. Signs of government buying have appeared at that price on the Shanghai Composite at least four times over the past six weeks.

Along with the Fed minutes, trading on Wednesday could also be impacted by reaction to the release of a report on consumer price inflation. The Shenzhen Component Index lost 2.90 percent to close at 12,584.58. The company said it remains on track with its takeover of Office Depot Inc. shares fell 2.6% premarket.

“The millions of people who are exposed to the whole index through their pensions and investments have been dealt a pretty heavy blow by the turmoil in China, and the collapse in commodity prices“.

The market was also encouraged by news that the central bank would offer selected banks new medium-term lending facility (MLF) loans in a bid to offset tightened liquidity conditions following the sharp devaluation of the yuan last week.

American Eagle Outfitters fell 9.7 percent to $16.50 after the retailer forecast current quarter same-store sales growth that disappointed investors.

The Shanghai Composite Index dropped 3.42 per cent, showing bailout measures were still falling short.

“The market is still lacking in confidence. The government doesn’t have enough money, or willingness to buy shares now”, said Samuel Chien, partner of hedge fund manager Shanghai Boom Trend Investment Management Co.

Another reason for the markets’ recent drift, Paulsen said, is that the news hasn’t been all that surprising.

But slowing growth and a surprise currency devaluation last week – seen as an attempt to boost stalling exports – have weighed on sentiment, despite a pledge by the market regulator on Friday that it will stabilize stock prices for a number of years.

The median stock on mainland bourses traded at 72 times reported earnings on Monday, more expensive than any of the world’s 10 largest markets. It was 68 at the peak of China’s equity bubble in 2007, according to data compiled by Bloomberg.

In the biggest of the deals, Huijin acquired 1.81 billion Bank of China shares, which closed at 4.20 yuan on Wednesday, making the purchase worth 7.6 billion yuan.

The benchmark Shanghai Composite Index dropped 3.12 percent, or 116.76 points, to 3,631.40.

Cathay Pacific Airways fell 3.4 per cent, headed for its biggest two-day decline since 2011.

Only last month, the ministry predicted exports would improve in the second half of this year from the first half.