Australia

The Australian share market is expected to open higher after Wall Street clawed back some of its losses of the previous day.

The SPI200 futures contract was up 47 points, or 0.74 per cent, at 6,437.0 at 8am Sydney time, suggesting an early bounce for the benchmark S&P/ASX200 on Wednesday.

Australia's share market has been hammered for a second straight day as it emerges as one of the biggest losers from the intensifying US-China trade war.

The benchmark S&P/ASX200 index was down 162.2 points, or 2.44 per cent, to 6,478 points on Tuesday, while the broader All Ordinaries was down 164.2 points, or 2.45 per cent, to 6,546.4 points.

In the US, the Dow Jones Industrial Average finished up 1.21 per cent, the S&P 500 was up 1.30 per cent and the tech-heavy Nasdaq Composite was up 1.39 per cent.

Commonwealth Bank's full-year profit has fallen 4.7 per cent to $8.49 billion.

The decline was driven by a 2.0 per cent fall in operating income to $24.4 billion, while loan impairment expenses jumped 11 per cent to $1.2 billion.

The bank also booked $918 million in customer remediation expenses and an additional $358 million hit for risk and compliance programs related to the banking royal commission.

The Aussie dollar is buying 67.59 US cents from 67.83 US cents on Tuesday.

Asia

China’s tumbling yuan steadied on Tuesday as authorities took steps to contain its slide, while stocks tanked after Washington labelled Beijing a currency manipulator in a sharp escalation of Sino-US trade tensions.

The currency has slumped as much as 2.7 per cent over the past three days, breaking through the symbolic 7-per-dollar level, pounding stocks and pushing bonds higher as investors feared the yuan’s value has become a new front in the trade war.

The stabilisation in the yuan helped major stock indexes pare some of their early morning losses in afternoon trade, but markets drifted lower again to finish in the red.

The Shanghai Composite Index fell as much as 3.1 per cent before recovering somewhat to close 1.6 per cent lower - still its lowest close since February. Hong Kong's Hang Seng Index closed at its lowest since January, but also recovered from shedding almost 3 per cent to end down 0.7 per cent.

Hong Kong's Hang Seng is off 0.67 per cent.

Japanese shares plummeted on Tuesday to their lowest since early January. The Nikkei share average fell 0.65 per cent to 20,585.31, after diving 2.94 per cent at one point and hitting its lowest since Jan. 10. The broader Topix lost 0.44 per cent to 1,499.23.

Europe

European shares finished lower on Tuesday weighed down by trade worries as support from upbeat German data and China stepping in to stabilize its currency proved to be temporary.

After trading higher for most of the session and gaining up to 0.7 per cent, the pan-European stocks benchmark STOXX 600 index closed 0.5 per cent lower, extending a trade driven rout to a third session.

The brief bounce after a two-day sell-off was spurred by China’s central bank fixing the yuan at a slightly stronger rate on Tuesday, allaying fears that Beijing would use its currency as the new front in its trade battle with the US.

Fears of the trade war between the US and China turning into a currency battle had spooked investors on Monday as Beijing let the yuan slip below a key 7 to dollar level after US President Donald Trump threatened last week to slap a 10 per cent tariff on the remaining $300 billion of Chinese imports.

This revived concerns that the trade war, which has already disrupted supply chains and contributed to a slowdown in global growth, would worsen and get more protracted to end a steady recovery in stocks over the last two months

London's FTSE 100 index packed with miners and commodity-focused firms who are heavily exposed to Chinese demand, fell 0.7 per cent to a two-month low, while Germany's DAX reversed a 1 per cent jump to close down 0.8 per cent.

Data that German industrial orders exceeded expectations had also supported sentiment earlier in the day. The industrial sector was among top performing major sectors before markets turned lower.

In company news, Metro was the worst performer on the main index, down 8.1 per cent after Czech businessman Daniel Kretinsky’s investment vehicle confirmed it would not raise its 5.8 billion euro bid for the German retailer.

British aero-engine maker Rolls Royce plc followed with its 6.9 per cent decline as it raised its cost estimates.

Vivendi shares jumped on news that it may sell a 10 per cent stake in Universal Music Group to Chinese tech group Tencent, while industrial group Rotork Plc topped STOXX 600 on posting strong first-half results.

North America

US stocks have jumped more than 1 per cent, bouncing back from a sharp sell-off the previous day as China stepped in to stabilise the yuan, easing concerns that currencies would be the next weapon in the US-China trade war.

China's overnight intervention came after the US Treasury Department labelled Beijing a currency manipulator as it let the yuan slide to a more than decade low on Monday.

The gains on Tuesday came a day after US stocks' biggest percentage drop of the year and a sharp fall in the Chinese currency.

China's move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow's comment that President Donald Trump was planning to host a Chinese delegation for talks in September allayed fears of a further escalation in the trade war.

The S&P technology index, which includes companies that have a big exposure to China and were at the heart of Monday's sell-off, provided the biggest boost to the S&P index, rising 1.61 per cent.

The Dow Jones Industrial Average on Tuesday rose 311.78 points, or 1.21 per cent, to 26,029.52; the S&P 500 gained 37.03 points, or 1.30 per cent, to 2,881.77; and the Nasdaq Composite added 107.23 points, or 1.39 per cent, to 7,833.27.

The S&P 500 and Nasdaq each snapped a six-day losing streak. Stocks had been reeling from last week's shock when Trump vowed to slap a 10 per cent tariff on a further $US300 billion in imports from China.

After the bell, shares of Walt Disney fell 2.6 per cent following the release of its quarterly results.

During the regular session, Apple gained 1.9 per cent after recent heavy losses while the Philadelphia Semiconductor index edged 1.28 per cent higher.

Among other stocks, Take-Two Interactive Software jumped 8.0 per cent after the video-game publisher raised its full-year revenue forecast.