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China shares fall as financials, consumer firms drag; Tencent weighs on HSI

* SSEC -0.45%, CSI300 -0.84%, HSI -0.21%

* Commodity sector up; China measures seen to have fleeting effect

* Tencent weighs on Hang Seng after Q1 results

SHANGHAI, May 21 (Reuters) - China shares fell on Friday dragged down by financials and consumer firms, while a sharp drop in gaming and social media giant Tencent Holdings Ltd despite a forecast-beating profit jump weighed on the Hong Kong’s benchmark index.

** At the midday break, the Shanghai Composite index was down 0.45% at 3,491.04. ** China’s blue-chip CSI300 index was down 0.84%, with its financial sector sub-index leading losses, falling 1.29%. ** The consumer staples sector shed 1.04%, the real estate index lost 0.43% and the healthcare sub-index fell 0.73%. ** But commodities firms rebounded as analysts said China’s pledge to strengthen management to curb “unreasonable” increases in commodity prices are likely to have only a temporary effect. ** The CSI300 energy index added 0.88% and the CSI A-share resource industries index rose 0.92%. ** Chinese H-shares listed in Hong Kong rose 0.42% to 10,687.89, while the Hang Seng Index was down 0.21% at 28,391.89. ** The Hang Seng was hit by a 3.86% drop in index heavyweight Tencent Holdings Ltd despite a 65% surge in first-quarter profit, beating forecasts. ** Crypto-related shares in Hong Kong slumped after U.S. Federal Reserve chief Jerome Powell said cryptocurrencies pose risks to financial stability and indicated that greater regulation may be warranted. ** Okg Technology Holdings Ltd, an affiliate of crypto exchange OK Coin, fell 4.26% and Huobi Tech, an affiliate of crypto exchange operator Huobi, lost 1.23% ** But following a regulatory announcement of a tougher ban by Beijing on crypto-related services by financial companies, market players in China said it was business as usual in the country. ** The smaller Shenzhen index was down 0.2%, the start-up board ChiNext Composite index was weaker by 0.57% and Shanghai’s tech-focused STAR50 index was down 0.68%. ** The yuan was quoted at 6.4342 per U.S. dollar, 0.02% firmer than the previous close of 6.4355. (Reporting by Andrew Galbraith; Editing by Rashmi Aich)

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