Aug 3 (Reuters) – Hong Kong stocks fell on Tuesday as tech stocks pulled down as index heavyweight Tencent Holdings Ltd slumped after a media report stoked concerns about stricter regulations on online games.
** The Hang Seng Index and the Chinese Enterprise Index both fell 0.2% to 26,194.82 and 9,320.38, respectively. The Hang Seng technology index fell 1.5%.
** Tencent fell 10.8% after Economic Information Daily called online video games “spiritual opium”, worrying investors that the sector could be next in the sights of regulators.
** Tencent shares recouped some losses to end the day down 6.1%, after China’s largest social media and video game company pledged to restrict underage access to its video game flagship, and after the article disappeared from the media’s website and WeChat account.
** Hong Kong-listed shares of competitors NetEase Inc XD Inc and GMGE Technology Group Ltd also plunged on Tuesday. ** “We don’t like recent news on the regulatory side. We are reducing our exposure to sectors that are at higher risk of being regulated, ”said Alex Wong, Director, Ample Finance Group, Hong Kong.
** Wong added that the fund manager is shifting its exposure to less policy sensitive sectors, such as manufacturing, electric vehicles or consumer brands. ** “We expect regulatory crackdown 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 that the asset manager was neutral on Chinese equities. ** Real estate stocks continued to decline.
** China Evergrande Group, the country’s most indebted developer, fell about 8% after Moody’s downgraded the company and its subsidiaries, and a unit of Leo Group sued Evergrande for non-payment of advertising costs . (Reporting from the Shanghai Newsroom; Editing by Rashmi Aich)