China's securities account openings rose at the slowest pace in almost two months on Monday as a stock market rout, triggered by the tripling of the tax on share trades, deterred people from entering the market.

"The recent slump has hurt investors' confidence," said Zhang Shuntai, who oversees about $127 million at Zhonghai Fund Management Co in Shanghai . "If we see a rebound on the market, more investors will open accounts again."

The number of accounts set up for trading mainland shares and investing in mutual funds totaled 240,485 on Monday, the lowest tally since April 11, according to figures by the China Securities Depository & Clearing Corp. That's down from a peak of 1.08 million accounts opened on April 30.

The CSI 300 Index rose 1.2 percent to 3,677.58 at the close in volatile trading yesterday. It fell as much as 2.3 percent and rose 2.1 percent.

The index has slid 12 percent since closing at a record 4,168.29 on May 29 after the government increased the stamp duty to 0.3 percent.

The slide, which has wiped out more than $300 billion of market value, came after central bank Governor Zhou Xiaochuan and former Federal Reserve chairman Alan Greenspan expressed concern that gains were excessive.

The CSI 300 is still up 80 percent this year, after more than doubling in 2006.

A rally in A-share prices since 2005 has been "consistently correlated" with the number of trading accounts opened, Jonathan Anderson, chief Asia economist at UBS AG in Hong Kong , said in a report last month.

Individual investors are responsible for about 60 percent of funds in the market, according to Wu Jianxiong, an analyst at Guotai Junan Securities Co in Shanghai.

Chinese investors have opened 102.5 million accounts in total so far, with about 24 million set up this year, according to the clearing house. The daily average account openings have been about 300,000 over the past three months.

"The growth pace of new accounts was too fast to sustain," Wu said.

The index closed 3.5 percent higher on Tuesday, after declining as much as 7.5 percent earlier on speculation that the government will take action to stem the decline.

The central bank's Vice-Governor Wu Xiaoling yesterday said the government wants to ensure the health of the capital market and understands that market gains are "inevitable" because they reflect the economy's growth.

Officials shouldn't suppress the growth of the country's stock market, the Shanghai Securities News said in a front-page commentary yesterday, citing Teng Tai, an economist at China Galaxy Securities Co, the nation's largest brokerage.