SHANGHAI: China’s stock markets rose on Thursday, after the central bank cut the borrowing cost of its medium-term policy loans for the first time in 10 months to aid a shaky economic recovery.

Data on Thursday showed China’s industrial output and retail sales growth missed expectations amid faltering demand at home and abroad.

The People’s Bank of China (PBOC) said it lowered the rate on 237 billion yuan ($33.1 billion) of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.65%,in line with market expectations.

The rise also comes as the US Federal Reserve paused interest rate hikes overnight, sending Asia-Pacific shares outside Japan slightly higher.

China’s benchmark CSI 300 Index added 0.6% in early trade, while Hong Kong’s Hang Seng Index climbed 1.2%.

Investors are closely watching developments on the geopolitical front.

US Secretary of State Antony Blinken is expected to visit Beijing next week amid escalated tensions between two countries, although the US played down expectations of any breakthrough from the trip.

China stocks end up on central bank’s rate cut

“Looking forward, the market hopes for more supportive policies to stimulate consumption. Another positive catalyst for Chinese equities would be increased communication between the US and China,” said Jian Shi Cortesi, investment director of China equity funds at GAM Investments.