CHINA stocks closed sharply higher Thursday, with the benchmark Shanghai Composite Index surging 304.70 points or 9.29 percent — its biggest percentage gain ever — after the government cut the tax on stock trading.

    The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, finished the session at 3,583.03. In early trade the benchmark rose as much as 9.6 percent. The Shenzhen Component Index climbed 9.59 percent to end at 12,914.76 points.

    The jump came after the government announced late Wednesday that it was cutting a stamp tax on share transactions to 0.1 percent from 0.3 percent, effective Thursday, in an effort to end a bear run that had seen the key index slump by half in sixth months.

    That reversed a tax increase imposed May 30, when regulators were trying to cool surging stock prices.

    Chinese 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. As of Thursday’s close it was still down 31 percent for the year.

    For the first time in more than a year, the Shanghai index dropped below 3,000 briefly Tuesday before rebounding later in the day. Rumors that another market-boost measure was in the works helped push the index up 4.2 percent Wednesday.

    Meanwhile, Hong Kong stocks climbed for a fourth straight session Thursday, pulled higher by the mainland’s soaring bourses.

    The blue chip Hang Seng Index rose 391.54 points, or 1.6 percent, to 25,680.78 after profit-taking trimmed earlier gains amid concerns of continued volatility in Chinese markets.

    (SD-Agencies)