China stocks closed lower on Monday as some investors took profits on infrastructure and transportation shares, leaving the bluechip CSI 300 index with its worst loss in three weeks. The CSI300 index, which tracks the largest listed companies trading in Shanghai and Shenzhen, fell 0.8 percent to 3,336.79 points, its biggest percentage fall since August 1.
The Shanghai Composite Index closed down 0.7 percent at 3,084.81. Analysts said they expect further capital inflows to boost sentiment over the long run. Infrastructure and transportation sectors were among the top losers on Monday, with sub-indexes, falling 1.32 percent and 0.87 percent, respectively. The two sectors rose last week as state media reported that investment by Chinese firms into "One Belt, One Road" countries along the new Silk Road trade route has already reached $51.1 billion.
Zhang Qi, senior analyst at Haitong Securities in Shanghai, said trading was muted on Monday but he expects the upcoming launch of the Shenzhen-Hong Kong stock connect to attract some foreign capital into companies listed in Shenzhen. "The market is quite stable and bland today despite some slight falls in the indexes and trading volumes. We have seen such a trend over the past few days and (I expect to see the trend) extend in the near term," Zhang said, adding that bluechip stocks were also trading narrowly.
The real estate sector outperformed the market, with the subindex rising 0.52 percent, led by China Vanke Co. The index has risen more than 22 percent so far this month. China Vanke, the country's biggest home builder, said on Sunday its first-half profit rose 10 percent, even though business has been bit a high-profile battle for control of the firm.
By the lunch break, Vanke's Shenzhen-listed shares gained 1.34 percent. Its Hong Kong-listed shares rose 0.74 percent, while it gained more than 2 percent at one point during morning trade. Total volume of A shares traded in Shanghai was 10.60 billion shares, while Shenzhen volume was 12.50 billion shares.