Shanghai shares drop 1.14% on cautious investors

Investors take a wait-and-see stance after the China Banking and Insurance Regulatory Commission vows to take action to control financial risks.

Shanghai shares fell more than one percent today as investors turned cautious and decided to wait and see after China's banking regulator said it would control financial risks in the second half of this year.

The Shanghai Composite Index dropped 1.14 percent to close at 2,737.74 points.

The China Banking and Insurance Regulatory Commission said on Wednesday night that it will conduct a three-year action plan that aims to prevent financial risks in both the banking and insurance sectors in rest of the year.

The CBIRC added that it will strengthen control over Internet finance and improve lending practices on property to fend off a real estate bubble, according to a statement released on its official website.

Shares of telecommunication firms, computer companies, as well as iron and steel providers were among the biggest decliners. Telecom shares fell 2.82 percent and iron and steel makers lost 2.37 percent.

Huada Automotive Technology Co Ltd shed 4.86 percent to 18.40 yuan (US$ 2.69) and Xinyu Iron & Steel Co Ltd fell 4.49 percent to 6.59 yuan.

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