CHINA stocks closed up yesterday after authorities announced a package of measures to boost investor confidence.

But the market pared most of the strong opening gains amid broader concerns about the country’s slowing economic growth.

The mainland’s blue-chip CSI 300 Index was up 1.17%, some distance from the 5.46% jump at the market open. Hong Kong’s Hang Seng Index advanced 0.97% after opening up 3.1%.

The government introduced a slew of measures over the weekend to shore up the market, as part of several other economic support steps over the past few weeks.

The finance ministry said it was halving the stamp duty on stock trading from 0.1% to 0.05%, in a move to “invigorate capital markets and boost investor confidence.” The reduction is the first since 2008.

The China Securities Regulatory Commission also restricted share sales by top stakeholders at firms whose stock prices have fallen below initial public offering (IPO) levels or net asset levels and lowered margin ratios for leveraged trades.

The regulator said it will slow the pace of IPOs, citing “recent market conditions,” without giving details on how it would do so.

“The policy package sent a clear signal to boost investor confidence as the market hit the bottom,” said analysts at China Asset Management Co.

Shares rose in most sectors, with securities brokers climbing 2.3%, after jumping more than 10% at the open.

“A reduction in stamp duty would benefit securities brokers directly,” said analysts at BOC International (China) Co., as trading activity could increase after the cut.

Real estate developers also advanced 4% amid the latest measures to aid the property markets, including relaxing residential housing loan rules and supporting affordable housing.

The package of measures come as China’s stock benchmark dropped to nine-month lows earlier this month, erasing all gains made following the reopening from COVID curbs.

Authorities earlier this month urged pension funds, large banks and other big domestic financial institutions to increase stock investments to support the market.

Regulators have also cut handling fees on stock transactions, prodded mutual fund managers to increase purchases of their own equity funds and encouraged companies to do more share buybacks.

Despite the latest action to boost confidence, foreign investors offloaded a net 8.2 billion yuan (US$1.12 billion) in Chinese stocks via the Stock Connect program yesterday, having been net sellers in 14 out of 15 previous sessions.

“The market is well versed with the stamp duty cut and its effects. The sentiment boost from such a cut will be fleeting, but its policy intent should not be unheeded,” said Hong Hao, chief economist at GROW Investment Group.

Lu Ting, chief China economist at Nomura, expected the policies’ impact on the market would be short-lived if there are no more measures to support the real economy.

“In the longer term, investors still have to focus on the changes in the country’s economic fundamentals,” said analysts at Western Securities. (SD-Agencies)