By Jason Xue and Brenda Goh

SHANGHAI (Reuters) – Chinese gaming stocks rose on Wednesday to outperform a weak broader market, after Reuters reported China removed a gaming regulatory official.

China’s CSI Anime Comic Game Index gained as much as 3.1% in early trading, against a 0.3% drop in the broad market.

China removed Feng Shixin from a government body overseeing its press and publications regulator, five sources who were briefed on the matter said, days after Chinese gaming stocks were hit by proposed rules to curb spending on video games.

“The removal of the official aims to release goodwill to the public and demonstrated its (China’s) stance of maintaining confidence in all walks of life,” said Rukim Kuang, founder of Beijing-based Lens Consulting.

“It is expected that the proposed gaming draft rule will not be implemented in the short term.”

Feng was removed last week from his position as head of the publishing unit of the Communist Party’s Publicity Department, the sources said. The department oversees the National Press and Publication Administration (NPPA), which, in turn, regulates China’s vast video games sector.

The sources said Feng’s removal was linked to rules the NPPA announced last month that sent stocks in the world’s largest video games sector, including industry giant Tencent, plunging.

The Chinese government did not immediately respond to a request for comment about Feng’s removal and Reuters was unable to obtain his contact details to reach him for a comment.

The NPPA’s proposed measures, which seek to curb spending and the use of rewards that encourage the playing of video games, triggered fears that authorities were once again cracking down heavily on the sector and wiped nearly $80 billion off the market value of Tencent and NetEase Inc, China’s two biggest gaming companies.

Shares in Tencent added about 0.5% and NetEase climbed 1.5% on Wednesday, while the Hang Seng benchmark slipped more than 1%.