Update | Hong Kong stocks suffer worst fall in 7 months; Tencent plunges as online game described as ‘poison’
Hang Seng Index declines 395.16 points, or 1.5 per cent, to end at 25,389, while Shanghai Composite ends 0.4 per cent lower, its first drop in four sessions
Chinese and Hong Kong investors dumped tech shares on Tuesday, after the Communist Party’s mouthpiece labelled Tencent’s popular online game Honour of King s as “poison” and called for tighter industry regulation, with the tech sell-off spilling over to wider markets and pounding major benchmark indices.
In Hong Kong, the Hang Seng Index declined 395.16 points, or 1.5 per cent, to end at 25,389.01, marking the steepest percentage decline since mid-December. The index briefly tumbled 532 points, or 2.1 per cent, to a low of 25,251.72.
The Hang Seng China Enterprises Index, which tracks the performance of Chinese companies listed in Hong Kong, dropped 106.5 points, or 1 per cent, to close at 10,305.98.
Chinese online major Tencent was the biggest drag on the benchmark, contributing more than 110 points of losses. The stock has a 10 per cent weighting in the Hang Seng Index.
Tencent finished at HK$269.2, down 4.1 per cent, its biggest fall in nearly 17 months, wiping out more than HK$100 billion (US$12.81 billion) of market capitalisation.
The losses came after the state-run People’s Daily published an editorial on Tuesday that labelled Tencent’s Honour of Kings, an online game boasting 80 million active daily users, as “poison” and “a harm” to people’s life and the society. The newspaper published a separate online article later in the day, calling for tighter regulation of mobile games.
“The articles are apparently targeting Tencent,” said Chi-yung Sam, senior strategist for South China Financial Group.
