SHANGHAI, May 26 (Reuters) - Hong Kong stocks will be

under selling pressure on Tuesday, a broker said, as investors

respond to a crackdown by Beijing on illegal cross-border stock

trading which will impact an estimated $30 billion of investment

in the city.

The Hong Kong market resumes trading following a public

holiday and risk appetite will likely be curbed after China on

Friday punished online brokers Tiger, Futu and Longbridge for

moving Chinese money offshore without a license.

The industry-wide clampdown, which also requires a wind-down

of illegitimate trading accounts in two years, could affect as

much as HK$420 billion ($53.61 billion) worth of assets,

including HK$294 billion in Hong Kong, Kaiyuan Securities

estimates.

"This could roil market mood in the short term, but the

long-term impact on liquidity is limited," the brokerage said in

a report ahead of the market open.

The campaign's negative impact was already seen in the U.S.,

where the Nasdaq Golden Dragon China Index declined 2% on

Friday in the wake of China's announcement.

U.S.-listed KraneShares CSI China Internet ETF

slumped 3% and Tiger parent UP Fintech tumbled 25%.

As trading resumes in Hong Kong, the Hang Seng Tech Index

, a favourite target for mainland investors, could

suffer.

Hong Kong small-caps may also be vulnerable to an

expected liquidity drop, with small Hong Kong brokers such as

Bright Smart potentially becoming the target of

selling.

($1 = 7.8343 Hong Kong dollars)