The benchmark Hang Seng Index shed 272.08 points to 23,501.10 on turnover of HK$71.49 billion (US$9.22 billion).
With just one morning session of 2014 to go the market is up just 0.84 percent over the past 12 months. Tuesday’s sell-off was partly driven by profit-taking after a healthy rally in the previous session, while US traders were unable to provide any inspiration.
The S&P 500 gained 0.10 percent to mark a second successive record close on Wall Street, but the Dow snapped a seven-session winning streak by dipping 0.08 percent. The Nasdaq was virtually unchanged.
Adding as a drag on buying sentiment was news that Greek Prime Minister Antonio Samaras had called a general election provisionally for January 25 after lawmakers failed in a third attempt to choose a new president.
There are fears that the far-left Syriza party could win and roll back austerity measures required under the IMF-EU bailout of the country, in turn further weakening the eurozone economy.
HSBC fell 1.13 percent to HK$74.10, China Mobile lost 2.16 percent to HK$90.60, Henderson Land Development added 0.56 percent to HK$54.15 and Internet giant Tencent eased 0.10 percent to HK$113.30.
In mainland China the benchmark Shanghai Composite Index was flat, edging down 2.20 points to 3,165.82 on turnover of 437.3 billion yuan ($71.4 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 1.40 percent, or 19.92 points, to 1,398.57 on turnover of 218.4 billion yuan.
“Investors took a breather at year-end after recent swings,” Haitong Securities analyst Zhang Qi told AFP.
The Shanghai index reached a near five-year closing high on Monday, after China’s central bank reportedly adjusted its calculation method for deposits to allow banks to lend more money. The index has tacked on 50 percent gains over the past 12 months.
“The market may reach its peak for the next year at the beginning of 2015. However, it may go through a long period of consolidation afterwards,” Zhang added.
Aerospace and defence companies retreated after earlier gains. Shanghai-listed China Spacesat fell 4.20 percent to 28.04 yuan, while Shenzhen-listed SUFA Technology Industry eased 3.02 percent to 27.25 yuan.
Financial shares bucked the trend. On the Shanghai market, banking giant ICBC added 2.17 percent to 4.71 yuan, Citic Securities rose 3.95 percent to 33.46 yuan and Ping An Insurance gained 2.54 percent to 72.78 yuan. (AFP)