China stocks surge as steps to boost markets lift sentiment, CSI 300 jumps 5.5%

China's CSI 300 and Shanghai Composite surged over 5 percent each on August 28.

Benchmark indices in China and Hong Kong opened sharply higher on August 28 as investors cheered the new measures taken up by the authorities over the weekend to step up the traction in the equity market.

The slew of measures announced by the Chinese authorities include a reduction in stamp duty on stock trades and a slower pace of initial public offerings in a bid to woo back investors which fuelled a sharp rally across mainland China equities.

The CSI 300 index surged 5.5 percent intraday, while the Shanghai Composite rallied over 5 percent and Hong Kong's Hang Seng soared 3.3 percent.

The charge imposed on stock trades was halved to 0.05 percent from the earlier 0.1 percent starting from August 28, according to an announcement from the China's Ministry of Finance. This move is aimed at revitalising capital markets and enhancing investor trust, marking the first reduction in this fee since 2008.

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Additionally, the China Securities Regulatory Commission has revealed its intention to slow down the pace of initial public offerings (IPOs) due to "recent market conditions", although specific details were not provided. Further regulatory measures also include restrictions on share sales by major stakeholders in companies whose stock prices have fallen below the IPO levels or net asset levels, as well as reduced margin ratios for leveraged trades.

The Chinese authorities have been trying to ease investor concerns over the country's economy which has been bogged down by its battered  property sector and weakening consumer spending. The Chinese stock indices have also remained under pressure in the year so far, largely weighed down by the country's slower-than-expected economic recovery after Covid.

Going ahead, the investors will also remain focused on a few macroeconomic data, including the country's purchasing managers' indexes for August, due later this week.

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