Market turmoil in China earlier this year sent shares around the globe into a tizzy, but Goldman Sachs is staying bullish, despite slashing its index target.
Goldman cut its CSI 300 target to 4,000 from 5,000, but it noted that's still more than 20 percent upside from current levels. The index, which tracks 300 stocks listed in Shanghai and Shenzhen, tacked on 3.2 percent to 3,305.79 in intraday trade Thursday; China's markets were closed from October 1-7 for the weeklong National Day holiday.
"A lower target mainly reflects a more moderate, yet more sustainable, market liquidity profile, and higher risk premium given the still-recovering investor confidence," Goldman said in a note Thursday. "The ups and downs in the market haven't changed our strategic narrative for A-shares," Goldman said; A-shares are yuan-denominated stocks traded in China.
Read More China and Europe may team up to snub TPP
A nearly 40 percent selloff in mainland stock markets over the past few months exacerbated concerns over the mainland economy, especially after China's regulators took a series of dramatic measures to boost the stock market, including large-scale share purchases, that had the unintended effect of denting confidence in the government and spurring criticism that the incident was badly mishandled.
Reforms in China's regime for managing its currency in August resulted in an effective devaluation of the yuan against the U.S. dollar, spurring both speculation of a currency war and concerns over how the government is managing an economic transition toward a more market-oriented system.