SHANGHAI: China shares fell on Thursday, as investors took cues from state media reports to dump online gaming companies, fertilizer producers and spirit makers, worried these sectors could be the next target of a government crackdown.
Risk appetite is also curbed by concerns over the fresh outbreak of COVID-19, as the delta variant spreads in the country.
The blue-chip CSI300 index fell 0.6% to end at 4,948.67, while the Shanghai Composite Index lost 0.3% to 3,466.55.
Online gaming stocks, which slumped on Tuesday after a state media report labelling the industry "spiritual opium", fell further, as official Securities Times called for healthy development of the sector.
Gaming stocks including Perfect World, Youzu Interactive and Wuhu Sanqi Interactive Entertainment Network Technology all dropped.
Investors also scrambled to exit chemicals makers such as Luxi Chemicals Group and Yunnan Yuntianhua Co on news that China is probing into chemical fertilizer companies over price gouging.
Growth hormone stocks, including Changchun High & New Technology Industries and Anhui Anke Biotechnology (Group) Co tumbled, after state media issued a new warning that such products do damage to people's health.
In addition, investors dumped spirit makers, including Kweichow Moutai Co and Luzhou Laojiao Co, as they were spooked by an article on the Ministry of Science & Technology's website that linked alcohol with some types of cancers.