DHAKA: Chinese shares were up amid volatile trade as traders gauge the effect of a fresh rate cut by the central bank.

The mainland's benchmark Shanghai Composite was 3.1% higher at 3,054.97, recovering from early morning losses.

The index had fallen about 16% this week, sending shockwaves through global markets, reports BBC.

The dramatic losses and volatility in China has shattered investor confidence and led to sharp falls in Asia and the US over the past days.

On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in an effort to calm stock markets after the past days' turmoil.

It is the fifth interest rate cut by the People's Bank of China since November last year.

A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks.

BDST: 1251 HRS, AUG 26, 2015
RS

** Chinese shares continued to lose ground