HK shares fall as Tencent slumps on fear of online gaming crackdown

Hong Kong stocks fell on Tuesday, with tech shares leading declines, as index heavyweight Tencent Holdings Ltd slumped after a media report stoked concerns over tighter regulation on online gaming. The Hang Seng Tech Index fell 1.5%. ** Tencent slumped as much as 10.8% after Economic Information Daily branded online video games "spiritual opium", worrying investors that the sector may be next in regulators' crosshairs.

Hong Kong stocks fell on Tuesday, with tech shares leading declines, as index heavyweight Tencent Holdings Ltd slumped after a media report stoked concerns over tighter regulation on online gaming. ** Both The Hang Seng index and the China Enterprises Index fell 0.2% to 26,194.82 and 9,320.38, respectively. The Hang Seng Tech Index fell 1.5%.

** Tencent slumped as much as 10.8% after Economic Information Daily branded online video games "spiritual opium", worrying investors that the sector may be next in regulators' crosshairs. ** Tencent shares recouped some losses to end the day down 6.1% after China's largest social media and video game firm vowed to curb minors' access to its flagship video game, and after the article vanished from the media outlet's website and WeChat account.

** Hong Kong-listed shares of rivals NetEase Inc XD Inc and GMGE Technology Group Ltd also plunged on Tuesday. ** "We don't like the recent news flow from the regulatory side. We are reducing our exposure in those sectors which have a higher risk of being regulated," said Alex Wong, director, Ample Finance Group, Hong Kong. ** Wong added that the fund manager is shifting exposure to less policy-sensitive sectors such as manufacturing, electric vehicles, or consumption brand names. ** "We expect the regulatory clampdown to continue, but its pace and intensity may moderate as policymakers weigh its impact on growth and markets," BlackRock said in its weekly commentary, adding, the asset manager was neutral on Chinese equities. ** Property shares continued to sag.

** China Evergrande Group, the country's most indebted developer, slumped roughly 8% after Moody's downgraded the company and its affiliates, and a unit of Leo Group sued Evergrande for failing to pay fees for advertisement.

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