Chinese investors refrained from bets on stocks this week, even as state support unfolded after Beijing unveiled a litany of measures to shore up confidence in the world’s second-largest equity market.

Leveraged traders trimmed their holdings to a one-year low this week, while new stock-account openings dropped by more than 30 per cent in October, according to official data. The retreat in retail enthusiasm contrasted with the government ramping up efforts to prop up stocks, including liquidity injections through two monetary tools and reported suspensions of new share sales to keep a lid on supply.

The divergence illustrates investors’ unease over whether the latest bout of government interventions will drive sustained gains in stocks, which are grappling with weak domestic demand and the fallout of a rout in AI stocks in the US. Investment banks including Bank of America and Macquarie said that state intervention might stabilise sentiment, but would fall short of fuelling a fresh rally.

“There is a difference between stopping the bleeding and restoring the patient to full health,” said Stephen Innes, a managing partner at SPI Asset Management. “State-backed buying can steady the tape. Easier buy-back financing can improve liquidity. But if corporate earnings do not improve, the market eventually comes back to the same question. Who is buying once the government steps away?”Corporate earnings would continue to pose a risk to equities in the fourth quarter or early next year if Beijing maintained its piecemeal stimulus for the economy, according to brokerages. Third-quarter profits for Chinese listed companies fell 13 per cent from a year ago because of a higher base and sluggish domestic demand, according to China Merchants Securities.

The benchmark CSI 300 Index barely budged this week after the People’s Bank of China offered 100 billion yuan (US$15 billion) of liquidity support to asset-management, insurance and securities firms via a third round of a swap facility operation. The central bank also said on Wednesday that it received applications for more than 200 billion yuan in quotas for a relending programme to buy back stocks after cutting the interest rate by 25 basis points.

Some bellwether companies are also looking at buy-backs. ChangXin Memory Technologies (CXMT), the memory chipmaker that at one point was the most valuable listed company in China, said its chairman proposed doubling a buy-back plan to as much as 5 billion yuan, a move to showcase confidence in its business prospects.

CXMT is valued at 2.7 trillion yuan, the third-most valuable mainland-listed company after China Construction Bank and Industrial and Commercial Bank of China.

So far, the risk appetite remains muted. The yield on China’s 10-year benchmark government bond breached 1.6 per cent on Wednesday, underscoring that investors were seeking refuge in safe assets.

More drastic measures could be on the way. China’s securities regulator told investment banks to withhold initial public offerings and big secondary stock sales through informal window guidance, according to a media report.

China’s intervention in its stock market comes ahead of the Asia-Pacific Economic Cooperation summit in Shenzhen this month, a marquee event featuring President Xi Jinping and his US counterpart Donald Trump. Chinese financial regulators have a practice of meddling in the stock market before key political events, such as the annual legislative conference, to create a favourable mood.

For Citigroup, a shift in the current macro policy may hold the key to stock performances next year, with Beijing reluctant to alter its current approach due to strong exports.

“The latest announcements should cement the liquidity bottom. Weak macro fundamentals are likely to cap the upside,” said Citigroup analyst Yu Xiangrong. “An economic policy pivot is indispensable for a durable re-rating of China assets.”