SHARES in China shot higher Friday, propelled by a report that U.S. President Donald Trump is seeking a trade agreement with Chinese President Xi Jinping, and as investors cheered a new pledge of government support for private businesses.

At the close, the blue-chip CSI300 Index was 3.56 percent higher at 3,290.25 points, taking gains for the week to 3.67 percent. The Shanghai Composite Index ended 2.70 percent higher at 2,676.48 points, and was up 2.99 percent for the week.

Despite the sizable gains, however, both indexes remain far below their levels at the end of 2017. The CSI300 has lost 18.37 percent this year and the Shanghai Composite is down 19.07 percent, underscoring worries about the impact of the Sino-U.S. trade row on corporate profits and overall economic growth.

Consumer staples firms posted particularly strong gains, rising 6.23 percent for the day. Distiller Kweichow Moutai Co. gained 6.55 percent Friday after a string of volatile sessions that left it down 1.7 percent for the week.

The financial sector sub-index added 2.65 percent, real estate firms rose 0.41 percent and the health care sub-index closed 5.28 percent higher.

The smaller Shenzhen index ended up 3.43 percent and the startup board ChiNext Composite Index rose 4.82 percent, with smaller firms getting a boost from a promise of private sector support from Xi, who pledged more tax cuts and financial aid.

“This is part of a series of encouragements coming through from the government,” said Zhang Qi, an analyst at Haitong Securities in Shanghai, referring to policy support announced by regulators, such as enhanced market liquidity, earlier this week.

Shares had booked solid gains across the board in the morning session, and rallied even harder after the midday break on a Bloomberg report that Trump is interested in reaching a trade agreement with Xi at the G20 summit in Argentina later this month, and has asked key U.S. officials to begin drafting potential terms.

The report came after the two leaders expressed optimism about resolving their trade disputes following a phone call. Uncertainty over global trade has been one of the major factors behind the recent equity market rout, with recent economic data pointing to a deepening global impact from the trade war.

(SD-Agencies)