Shanghai shares fall after investors took profits

Coal companies, iron and steel makers give up earlier gains and insurers also drop due to enhanced supervision rules.

Shanghai stocks fell today after investors took profits in coal companies and iron and steel makers from earlier gains.

The Shanghai Composite Index lost 0.55 percent to close at 3,271.67 points.

"Investors tend to take a wait-and-see approach to the A-share market. Shares of iron and steel providers, coal companies and property developers fell today. These shares had a good performance on Tuesday and investors locked in profits," said Qin Hong, an analyst with Jingbailing Consulting firm.

Iron and steel makers dropped 2.15 percent and coal shares fell 1.81 percent, according to financial data provider Tonghuashun.

Shanxi Coking Co Ltd lost 4.91 percent to 12.02 yuan (US$1.90), Yanzhou Coal Mining Co Ltd fell 4.72 percent to 14.73 yuan and Fangda Special Steel Technology Co Ltd lost 4.14 percent to 17.37 yuan.

Shares of insurance companies also fell today after the China Insurance Regulatory Commission said it will enhance supervision of the insurers and their shareholders. The insurance sector lost 0.92 percent.

Some of the enhanced measures stipulate that an insurance company should have clear and reasonable shareholding structure and must reveal the actual controlling entity to the CIRC, as Reuters reported, citing a document handed out in Beijing at a press conference.

The CIRC also said that it will enhance supervision of ownership structure, source of funding, and actual controller of the insurance companies in order to crack down on irregularities and prevent risks.