China’s blue-chip CSI300 Index climbed 0.8% by the lunch break, while the Shanghai Composite Index gained 0.4%.

In Hong Kong, the benchmark Hang Seng Index rose 1.1%.

China cut its policy rate by 10 basis points today, part of a package of measures aimed at buttressing an economy bruised by the crushing Sino-US trade war.

Other policies announced yesterday include reducing the amount of cash that banks must hold as reserves and efforts to stabilise financial and property markets.

“Not only are these helpful in smoothing market volatility and shoring up investor confidence at stressed times, but they are also showcasing the authorities’ commitment to stabilise investors’ price and wealth-effect expectations,” Goldman Sachs wrote in a note.

The Wall Street bank nudged its 12-month index target for CSI300 to 4,400 points, 14% higher than the current level.

Goldman expects “the effective US tariff rate on Chinese imports to fall to around 60% from about 160% relatively soon.

US treasury secretary Scott Bessent and US trade representative Jamieson Greer will meet with China’s economic tzar He Lifeng on Saturday in Switzerland, moving toward a potential negotiations over trade disputes.

“Market uncertainty is abating, and risk appetite is growing,” Dongxing Securities wrote.

However, the brokerage warned of volatility ahead as the trade war’s economic impact on China will likely deepen.

Chinese banking shares rose after regulators said yesterday that sovereign fund Huijin will continue to help stabilise the market.

Banks are favoured by state-backed “National Team” investors, which have bought at least ¥110 billion (US$15.21 billion) worth of China-listed shares over the past month, according to an estimate from Goldman Sachs.

Defence-related stocks remained bullish amid rising geopolitical tensions as Pakistan vowed retaliation after Indian strike over tourist deaths.

Tech shares in China and Hong Kong rose after Beijing pledged support to the strategically important sector.