Hong Kong stocks tumbled on Friday, tech stocks saw sell-off as China’s new draft rules on gaming sector hit market sentiment

 

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Hong Kong stocks saw a massive sell-off on the last trading day before the Christmas holiday as China’s new draft rules on the gaming sector shocked the market.

The Hang Seng Tech Index tumbled 4.4% to close at 3,548, the Hang Seng Index sliding 1.7% to 16,340 and the Hang Seng China Enterprises Index falling 2.3% to 5,488.99

Technology heavyweights tumbled across the board, with game companies leading the losses. NetEase slumped by 24.6%, the biggest loss on record and erasing all its gains in the past one year. Tencent dived more than 12%, wiping out HK$367 billion in market value. XD Inc plunged 19% and CMGE down 16.8%. 

Education firms, movie companies, internet healthcare firms, biotech companies, mainland property developers were mostly down.

Non-ferrous metal companies rallied, led by aluminium producers. Coal miners outperformed on expectation of elevated coal prices as most Chinese regions see sharp decline in temperature. Shipping companies, pork producers, oil and gas companies, precious metal companies and defence stocks were mostly higher.

Chinese A-shares closed lower, with the Shanghai Composite Index fell 0.13% to close at 2,914, the Shenzhen Component Index down 0.39% and the tech-heavy Chinext Price Index down 0.37%. 

Game companies tumbled after Chinese regulator released draft rules to tighten restrictions on the gaming sector. Internet companies, cultural and media companies, software developers were mostly lower. 

Building material suppliers, defence stocks lithium mining companies, base metal companies, shipping companies, coal miners and oil companies outperformed.