(Yicai) Aug. 28 -- Chinese market indexes climbed after the country halved the 0.1 percent stamp duty on stock trading to buoy investor confidence.

The CSI 300 benchmark of Chinese mainland shares closed 1.2 percent higher, after opening up 5.5 percent, while the Shanghai Composite Index and the Shenzhen Component Index rose 1.1 percent and 1 percent higher, respectively. The Hang Seng China Enterprises Index gained 1.2 percent.

The cut in stamp duty on stock trading, effective today, was the first since 2008, after China’s revenue from the levy plunged 31 percent to CNY110.8 billion (USD15.2 billion) in the first half from a year earlier, according to official data.

The move is a major policy signal, an industry insider said, adding that it reflects the central government’s firm attitude toward reinvigorating the capital market and investor confidence.

The lower levy will produce the same benefits as tax-reduction policies, increasing the ranks of small and mid-scale investors and making tax inclusiveness more adequate to a capital market that is mainly dominated by such investors, the person noted.

The last adjustment in April 2008, when stamp duty on stock trading fell to 1 percent from 3 percent, drove a more than 9 percent gain in the Shanghai Composite Index. The index had a similar boost when in the September of the same year regulators announced that buyers would be exempt from paying the levy at a rate of one-thousandth of the transaction amount.

The Chinese mainland market has more than 220 million individual investors, accounting for nearly 99.8 percent of the total number. The share of micro investors -- those holding less than CNY100,000 (USD13,725) of shares -- accounted for 87.9 percent, while that of small investors -- those with between CNY100,000 and CNY500,000 -- make up 8.1 percent.

Editor: Futura Costaglione