Tencent and NetEase crashed and dragged down the Hang Seng after the SCMP reported that China will suspend approval for new online games, heating up Beijing's campaign against gaming addiction

The two gaming giants were already lower following news that Tencent and NetEase had been summoned to a meeting on Wednesday by regulators, led by the Communist Party's publicity department and gaming watchdog the National Press and Publication Administration, to discuss new restrictions on video games for minors, SCMP sources said who gave a grim warning for the world's largest video game market: Regulators are saying "everything is on hold", with the decision to freeze new video game approvals revealed at the meeting.

Another source said new video game approvals would be on hold "for a while," but there was no mention of a timeline. The reason behind regulation was to "cut the number of new games" and "reduce gaming addiction." 

As a result of the meeting, Tencent and NetEase plunged as much as 8.4% and 11.7%, respectively, in Hong Kong.

The news was a sharp blow to a tentative rebound that had investors eyeing the return of bull market for Hong Kong-listed tech stocks. It also accelerated a selloff in the Hang Seng Tech Index, which tumbled 4.5%

After edging toward a bull market, the Hang Seng Tech Index is now has 11% up from its Aug. 20 low, and around 40% below its February peak.