Stocks in China and Hong Kong rose on Friday morning as the US Federal Reserve held off from raising interest rates, citing in part growing global uncertainties.
Investor attention quickly shifted to domestic issues, with many seeing regulators' guidance to brokerages against an indiscriminate approach in the clean-up of illegal margin financing as being moderately positive.
"The US raising rates would trigger fresh fears of capital flight, so leaving the rates unchanged is positive, though mildly," said Yang Hai, strategist at Kaiyuan Securities.
"Regulators' softening stance in the clean-up of illegal margin financing is also market-soothing. The market had expected an end-September deadline, but obviously, it's not the case."
The market is unusually calm on a day when September index futures contracts will be settled, partly because the duel between the bulls and the bears was largely completed earlier in the week, Yang said.
The CSI300 index rose 0.6 per cent, to 3,256.98 points at the end of the morning session, while the Shanghai Composite Index gained 0.4 percent, to 3,098.28 points.
For the week, both indexes are set to fall around 3 per cent, failing to recover fully from the damage done during the first two days, during which the market tumbled roughly 6 per cent.
With the indexes around 40 per cent down from their mid-June highs, and numerous trading restrictions in place, nearly 80 per cent of investors have stood on the sidelines in recent weeks, resulting in weekly trading volumes at just one fourth of their peak in early July.
Positive property data released on Friday - home prices rose for the fourth straight month in August with a month-on-month gain of 0.3 per cent - had a relatively limited impact on the market as it was expected, according to Gerry Alfonso, director at Shenwan Hongyuan Securities Co.
A key index tracking real estate companies edged up only 0.3 per cent.
Brokers had a decent performance but CITIC Securities underperformed as rating agency Standard & Poor's downgraded China's biggest brokerage after several of its senior executives were under investigation for suspected market violations.
In Hong Kong, the Hang Seng index added 0.4 percent, to 21,946.73 points, while the Hong Kong China Enterprises Index gained 0.8 percent, to 10,048.27.
Shares of Hong Kong-listed Biostime International Holdings jumped 26 percent to their highest level since July 24, after the Dietary supplements maker said on Thursday it would buy Australian vitamin maker Swisse Wellness for about A$1.4 billion ($1 billion).