July 4 (Reuters) - Hong Kong shares suffered their worst day in 2017, with a slump in index heavyweight Tencent Holdings knocking the Hang Seng to a five-week low and threatening to halt the index's upward trend.
After the market's rapid gain in the first half, "investors are suffering from a bit of acrophobia," said Charles Wang, founder of Shenzhen-based fund house Academia Capital Management.
"It's natural for the market to see increasing volatility ahead."
The Hang Seng index fell 1.5 percent, to 25,389.01, representing the biggest one-day percentage fall since Dec. 15.
The China Enterprises Index lost 1.0 percent, to 10,305.98 points.
Hang Seng's upward momentum already appears to be losing steam, with the gauge fluctuating within a narrow range over the past month, after jumping 17 percent in January-May.
Tencent, the market's bellwether, tumbled over 4 percent, its biggest loss in over six months.
Fund manager Wang attributed Tencent's slump to recent negative comments around its popular one-line game products, as well as valuation concerns after its price surge.
Despite Tuesday's slump, the stock is still up 42 percent this year. (Reporting by the Shanghai Newsroom; Editing by Richard Borsuk)