(Bloomberg) -- A short-lived rally in Chinese stocks after Beijing’s latest attempt to shore up growth is underscoring the depth of investor pessimism toward the world’s second-largest economy.

The CSI 300 Index reversed losses to climb as much as 0.3% after the official Xinhua news agency reported that authorities will further ease mortgage policies to halt a slump in the residential property market. The benchmark started falling again in about 10 minutes, sliding to a fresh session low before ending the day down 0.4%.

A gauge of developers’ shares also gave up more than half of the gains spurred by the report. Meanwhile, benchmarks in Hong Kong shrugged off a separate report by Reuters that said China plans to cut stamp duty on domestic stock trading by as much as 50%.

The lack of response speaks to the gloom that has gripped China’s equity market and shows once again that policymakers’ efforts to revive investor confidence are falling short. Down about 10%, an index of Chinese shares listed in Hong Kong is the world’s worst performer this month among more than 90 equity gauges tracked by Bloomberg, and overseas funds have dumped onshore stocks at a record pace.

“The market is less sensitive to news at this current stage,” said Li Fuwen, a fund manager at Guangdong Value Forest Private Securities Investment Management. “What’s key right now is letting that downward momentum run out organically as polices have already turned supportive but it will take time for the shorts to be exhausted.”

Weakness in equity markets persisted in the morning session even as the China Securities Regulatory Commission on Thursday used a seminar with executives from the country’s pension fund, large banks and insurers to ask them to boost support for the market. The representatives of the participating financial institutions vowed to help stabilize the stock market and boost economic development, according to a CSRC statement. The banks and insurers that attended weren’t named.

The meeting — which coincided with reported announcements by a number of brokerages Thursday to cut commissions — also stressed the need to establish an evaluation mechanism with a time frame of at least three years, as well as increasing the scale and weighting of equity investment.

Fang Xinghai, a vice chairman of the CSRC, will host a meeting with some of the world’s biggest asset managers in Hong Kong, people familiar with the matter said, in its latest attempt to shore up confidence. Fidelity International Ltd. and Goldman Sachs Group Inc. are among those invited, one of the people said.

All of this comes after China took a series of steps to boost investor confidence recently, from guiding mutual funds to buy their own products and avoid dumping stocks, as well as asking companies to step up share buybacks.

Mortgage Easing

China is proposing that local governments can scrap a rule that disqualifies people who’ve ever had a mortgage - even if fully repaid - from being considered a first-time homebuyer in major cities, the Xinhua report said, citing policymakers.

A Bloomberg gauge of Chinese property stocks rose as much as 2.3% before paring more than half the advance.

The latest move “will release some buying power but the focus still at developers’ existing debt problem,” said Steven Leung, an executive director at Uob Kay Hian Hong Kong.

The CSRC will study suggestions made by the institutions to enhance support and conditions for pension funds, insurance funds and banks’ wealth management funds to participate in the market for the long term, according to the statement.

Authorities have held similar meetings with financial institutions, especially at times of market weakness, including one with private fund managers last week and another earlier with foreign assets managers. The regulator also met the pension fund and large banks in April last year amid a rout, shortly after which the CSI 300 lost another 5.7% before hitting a bottom. 

Overseas funds, who have been fleeing the mainland market, were sellers again on Friday. The offloaded the equivalent of $10.7 billion in a 13-day run of withdrawals through Wednesday, the longest since Bloomberg began tracking the data in 2016.

--With assistance from Li Liu and Abhishek Vishnoi.

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