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Most Chinese stocks fell as a fresh round of government support measures failed to spark gains outside the largest state-run companies.

More than two stocks dropped for each one that rose on the Shanghai Composite Index, which climbed 2.4 percent to 3,775.91 at the close. The benchmark gauge was supported by rallies in PetroChina Co. and Industrial & Commercial Bank of China Ltd., the two largest members on the index, amid speculation of buying by state-directed funds. The ChiNext measure of smaller companies sank 4.3 percent, while the Shenzhen Composite Index retreated 2.7 percent.

The latest attempts to stem China’s $3.2 trillion equity rout include a suspension of initial public offerings, central bank support for margin-trade financing and stock purchases by state-run financial firms. The steps -- which follow an interest-rate cut and reduced trading fees over the past week -- have so far failed to convince investors that valuations are cheap enough after a 27 percent drop in the Shanghai Composite from this year’s high on June 12.

“The market didn’t buy into the measures and the downbeat mood is quite hard to change,” Jimmy Zuo, a trader at Guosen Securities Co. in Shenzhen, said by phone.

At stake is the fate of a stock-market that’s lured record amounts of amateur investors and grown to become the world’s second-largest outside the U.S., with a market capitalization of $6.9 trillion. Further losses threaten Chinese companies’ efforts to curb leverage with new share sales, and may erode consumer confidence amid the weakest economic growth since 1990.

Liquidating Bets

Twenty-eight companies halted their IPOs, according to filings to the nation’s two exchanges Saturday. A group of 21 brokerages led by Citic Securities Co. will invest at least 120 billion yuan ($19.3 billion) in a stock-market fund, the Securities Association of China said the same day. Executives from 25 mutual funds vowed to buy shares and hold them for at least a year, according to an industry group association.

The Shanghai Composite completed its biggest three-week tumble since 1992 on Friday amid concern leveraged traders are liquidating bullish bets after equity valuations exceeded levels during the country’s stock-market bubble of 2007.

The outstanding balance of margin loans on the Shanghai Stock Exchange dropped for a 10th day on Friday, sliding to 1.24 trillion yuan in the longest stretch of declines since the city’s bourse began compiling the data. A five-fold surge in borrowing had helped propel the gauge to a 150 percent advance in the 12 months through June 12.

Tech Slump

“It is very difficult to stabilize a leveraged market dominated by retail investors,” Paul Chan, the Hong Kong-based chief investment officer for Asia ex-Japan at Invesco Ltd., said by phone. “I don’t know how this will pan out but in near term, it’s just going to expand more volatility.”

The Shanghai Composite’s 50-day volatility jumped to the highest level in seven years as the gauge surged as much as 7.8 percent at the open, the biggest intraday gain since 2008, before paring. Trading volumes were 17 percent above the 30-day average.

Rallies for the nation’s biggest financial and oil companies contributed to virtually all of the Shanghai Composite’s gains Monday. PetroChina, ICBC, Agricultural Bank of China Ltd., Bank of China Ltd., China Petroleum & Chemical Corp. and China Life Insurance Co. all climbed more than 8 percent.

The large-cap CSI 300 Index gained 2.9 percent. Hong Kong’s Hang Seng China Enterprises Index slid 3 percent. The Hang Seng Index dropped 3.2 percent, entering a correction with a 11 percent loss from April highs.

Foreigners Sell

Technology stocks tumbled in the mainland, with an industry gauge in the CSI 300 dropping 4 percent. Leshi Internet Information & Technology (Beijing) Co., the most heavily weighted stock in the ChiNext, slid by the 10 percent daily limit, while East Money Information Co., the second biggest, plunged 8.1 percent.

“Too many people are selling on the rebound, making it hard to sustain,” said Nelson Yan, the chief investment officer at the Hong Kong unit of Changjiang Securities Co. “The large scale of the supportive measures betrays a lack of confidence in the market.”

Foreigners were net sellers of 13.4 billion yuan of mainland shares through the Hong Kong-Shanghai link Monday, the most since the program began in November.

In Hong Kong, the benchmark index capped its biggest loss in three years amid speculation Chinese investors were shifting money out of the city’s market and as Greece’s rejection of austerity measures spurred equity declines across Asia. Hong Kong Exchanges & Clearing Ltd., the exchange operator, plunged 9.6 percent for its biggest loss since October 2008 after Goldman Sachs Group Inc. recommended selling the shares.

(For more on Chinese stocks, click here.)