Shares fall as investors take profits

Shanghai shares fell on Thursday as more investors tried to lock in profits from gains in the telecommunications and brokerages sectors.

The Shanghai Composite Index lost 1.32 percent to 2,567.44 points.

Qin Hong, an analyst with Jingbailing Consulting, said market sentiment was dampened by the fall in the 5G sector, which led to declines in the A-share market.

Investors appeared to be waiting for the November economic data which includes Caixin PMI.

Gao Ting, head of China strategy at UBS Securities, said in a note that "despite A-shares diving more than 20 percent this year, we expect foreign participation to gradually rise as China travels the road to full inclusion, and the A-share market, currently heavily retail-driven, becomes more institutionalised."

In September this year, MSCI launched a round of consultation on lifting the weighting of China A-shares in its indexes through raising the inclusion factor (from 5 percent to 20 percent) and adding A-share mid-cap stocks.

If the inclusion factor is raised from 5 percent to 20 percent, more fund will flow into the A-share market and market sentiment will be improved.

"Among A-shares, foreign investors are prominent in food and beverage, consumer durables and insurance and we expect these sectors to stay in favor," Gao added.

Wuhan Bester Group Telecom Co Ltd dropped 9.09 percent to 20.20 yuan (US$ 2.91) and Caitong Securities Co Ltd fell 6.55 percent to 7.71 yuan.