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Stamp duty cut sends China stocks soaring

The Shanghai Composite Index (SCI) posted its biggest single-day gain in seven years on Thursday, closing up 9.3% at 3,583.03 points, the Financial Times reported. Hong Kong also benefited from Shanghai’s surge, the Hang Seng Index closing up 1.5% at 25,680.78, a three-month high. The bump in stock prices came in the wake of Beijing’s decision to reduce the stamp duty levied on share trades from 0.3% to 0.1%. It was only last May that the government increased the stamp duty by an identical amount in a bid to restrain investors. This about-turn was a response to a disappointing last six months for the market, culminating in the SCI’s descent to 3,069.49 on Tuesday, down 50% from its October peak. However, some analysts were skeptical about the sustainability of the current rebound.

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