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Asian shares stayed stuck at seven-month lows on Wednesday, as markets continued to digest a storm in Chinese equity markets, while the dollar rested with traders reluctant to place large bets ahead of the outcome of the Federal Reserve meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dropped 0.35% in early trading, having fallen in each of the three previous sessions as regulatory crackdowns in China roiled stocks in the technology, property and education sectors, leaving international investors bruised.

"China and the Fed are the two key things for today," said Tai Hui, chief market strategist for Asia Pacific, at JPMorgan Asset Management.

Shares in Asia-Pacific were mostly lower in Wednesday trade, with stocks in Hong Kong struggling to bounce back from a two-day rout.

In Wednesday afternoon trade, the Hang Seng index was 1.42% higher. That followed a more than 8% decline over two days earlier this week triggered by regulatory fears over sectors such as technology and private education.

· China shares search for footing as state media urges calm

Chinese shares fell on Wednesday but trimmed earlier losses amid volatile trade as state-run financial media called for calm following a wild rout triggered by investor concerns about tightening government regulation.

The Shanghai Composite Index fell as much as 2% before finishing the morning session down 0.59%. The blue-chip CSI300 index clawed back some its losses to end the morning flat, but was still down more than 6.6% for the week.

· UBS warns that it’s not time to bottom fish in the Chinese markets yet

Investors looking for bargains in the Chinese market should beware as stocks there could see further losses, warns UBS Global Wealth Management’s Kelvin Tay.

“I think there’s actually more room for this to actually run,” Tay, regional chief investment officer at the firm, told CNBC’s “Squawk Box Asia” on Wednesday. “I certainly don’t think this is the bottom.”

Tay said Beijing’s regulatory crackdown coincides with a “window of opportunity” as the global economy bounces back from the pandemic.

“Economic growth this year is not disputed because you have the U.S. growing at 7%, you have the eurozone recovering at 4.3%, that in turn is likely to pull the Chinese economy along with it as well,” he said.

Furthermore, the Politburo meeting next year in October will coincide with the end of Chinese President Xi Jinping’s second five-year term — a “very, very important event” for the country.

· Nikkei slips on softer Wall Street, record virus cases in Tokyo

The Nikkei fell to near a six-month low on Wednesday, as a retreat in Wall Street and concerns about rising coronavirus cases soured sentiment ahead of the U.S. Federal Reserve’s policy meeting.

Shin-Etsu Chemical dipped despite fairly upbeat earnings, while Apple suppliers slipped following the U.S. tech giant’s results, signalling some growth stocks could face hurdles as the earnings season comes into a full swing.

Nikkei share average fell 1.15% to 27,648.77, edging near a 6-1/2-month low of 27,330 touched last week. The broader Topix declined 0.73% to 1,923.83, led by 1.09% fall in growth stocks.

European markets were mixed on Wednesday morning amid a busy day for major corporate earnings, while investors awaited a key policy announcement from the U.S. Federal Reserve.