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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, according to BBC.

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

The BBC's Celia Hatton in Beijing explains that the move is aimed at a long-term effect on the growth of the Chinese economy, rather than at having an immediate impact on investors.