Stamp tax adjustments have never acted as a turning point for the stock market, Gaohua Securities said in a report. Such moves pushed up the index in the short term, but history suggested that they failed to reverse downtrends.

    The tax cut, while welcome, won't eliminate the market's problems. The prolonged downtrend would not be completely reversed unless inflationary pressures eased and housing prices stabilized, Wang said,

    Inflation soared to 11-year high of 8.7 percent in February after the worst snow storms in half a century.

    To help cap inflationary pressure, the government froze energy prices in January, prompting mounting fears for listed companies' earnings growth.

    On Thursday, more than half of the 20 largest-capitalized shares rose by the daily limit of 10 percent, including Sinopec, the country's biggest refiner; China Life, the biggest life insurer, and steel maker Baosteel.

    Brokerage shares led the leap, as people believe the trading income will greatly benefit from the rebound. Citic Securities, the country's biggest brokerage soared 10 percent to 32.13 yuan.

    The stock market was still immature in many ways and required urgent improvements in transparency, efficiency and proper operation, said an executive meeting of the State Council, presided over by Premier Wen Jiabao on Wednesday.

    Stock prices have fallen sharply since October, ending a boom that began in mid-2006. The main index has dropped by nearly half, hitting levels last seen in March 2007.

    Intense debate began early this month on whether the government should take steps to improve sentiment. The stamp cut was one of the subjects of the debate. After the tax was tripled last May in an attempt to rein in the market, 59.7 billion yuan in stamp tax revenue was collected for all of 2007. That compared with 17.9 billion collected in 2006.