China has made a series of moves to restore investor confidence in the world's second largest economy, including cutting a tax on stock trading for the first time since 2008.

Foreign investors dumped billions of dollars worth of Chinese stocks over the past few weeks as the prospects for the economy dimmed.

The announcements boosted Chinese stocks on Monday. However, much of the gains had evaporated by the afternoon as investors returned to worrying about China's real estate crisis and sluggish growth prospects.

The stamp duty on stock trades, which had stood at 0.1%, would be halved effective Monday, according to a joint statement by the Ministry of Finance and the State Administration of Taxation issued Sunday. The move was aimed at "reinvigorating the capital market and lifting investor confidence," the regulators said.

This is the first such reduction since April 24, 2008, when Beijing slashed the stock trading levy from 0.3% to 0.1% to prop up the market during turmoil caused by the global financial crisis. That move immediately triggered a 9.3% surge in the Shanghai Composite Index, marking the second biggest daily gain on record at the time.

Separately on Sunday, the China Securities Regulatory Commission (CSRC) the country's top securities watchdog, also unveiled several measures to "boost investor confidence" in the sagging stock market.

The measures included reducing the amount of collateral stock traders must hold with their brokers, slowing the pace of initial public offerings and setting restrictions on how much and how frequently major shareholders of listed companies can sell their shares on the stock market, according to multiple statements by the CSRC.

Chinese stock markets have declined sharply in recent weeks, as investors fretted about a worsening slowdown in the world's second largest economy and its real estate crisis. Since August 7, offshore investors have sold a net amount of 78 billion yuan ($11 billion) worth of Chinese stocks within three weeks, according to data from Hong Kong's Stock Connect trading scheme.

"The implication of the stamp duty tax cut is much bigger than just some trading cost savings for investors, as it sent signals to the market that the top management pays great attention to China stock market, to revitalize the investment sentiment," said Chris Liu, senior portfolio manager for mainland Chinese stocks at Invesco.

These measures also "help improve the market liquidity and lowering stock supply, which are positive for the overall supply demand situation for the China A-share market," Liu said, referring to yuan-denominated shares of Chinese companies that trade on the Shanghai or Shenzhen stock exchange.

Hong Kong's Hang Seng Index rose as much as 3.4% on Monday, before trimming gains to 1%. China's Shanghai Composite Index gained by up to 5% in early trading. But by the close of the session, it was just 1.1% higher.

"While the Chinese government managed to lift investors' sentiment temporarily, more concrete measures are required to resolve the property sector crisis and ... to reverse bearish expectation for the China economy," said Ken Cheung, chief Asian foreign exchange strategist for Mizuho Bank.

On August 18, the Hang Seng slid into a technical bear market, meaning it had fallen more than 20% from its most recent high, which was hit in late January.

By Monday, the Hang Seng had fallen 10% so far this year, while the Shanghai Composite lost 0.6%.