Rumors have been circulating that Chinese authorities intend to cut stamp duty on stock trades in a bid to boost its sluggish equity market. Now they are gaining support from gloomy data and national mouthpieces.

Chinas benchmark stock gauge CSI 300 Index plunges by 10% from Januarys highs, one of the worst performers in the world, as the dream for the nations strong post-pandemic recovery bursts.

In addition, the Shanghai Composite Index is trading lower again to around 3,000 points, a key threshold for retail investors who have been dragged into the The Battle of 3000-Point for more than a decade.

Whenever the Shanghai stock index fluctuated around the 3,000 mark, the market awaited authorities to carry out measures to boost investors confidence.

History repeats itself today, but this time is somewhat different.

Beijing is being urged to reduce stamp duty, a fee that has not changed since 2008. Retail investors, who account for around 80% of participants in the Chinese equity market, have been calling for this reduction since 2008. For each stock trade, investors are now charged 0.1% of the turnover.

Calls for reduction tones louder after Bloombergs report said Chinese regulators including the Ministry of Finance are discussing a draft proposal to cut stamp duty. The news coincided with the Hong Kong securities industry pushing for cuts in stamp duty and other financing costs to revive moribund markets.

Recently, Chinas state-backed media have raised the prospect of a reduction. There is indeed a need and room for adjusting stamp duty on securities trades, reported the state-owned China National Radio (CNR), citing economists. In addition, Beijing Business Today and China Economic Net both discussed the need for a market revival.

A stamp duty cut is broadly regarded as a sincere move by Chinese officials, not just a catchphrase, that they are determined to boost the market. Any reduction in 0.1% stamp duty on stock trades has the potential to trigger a blow-your-mind rally in the nations US$9.9 trillion equity market.

Although the country's securities authorities taking action to reduce handling costs for transactions, lower commissions, and implement other stimuli, the market is 'stubbornly' moving downhill. The market sentiment even sours after all of these measures.

But if transaction fees are cut, can stamp duty be far behind?