Hong Kong shares tumbled 2.48 percent on Wednesday as traders become increasingly concerned about the strength of the mainland Chinese economy after another batch of weak data.
The benchmark Hang Seng Index fell 511.34 points to end at 20,147.31 on turnover of HK$67.99 billion ($8.77 billion).
Property developers and mainland banks were among the hardest hit. Sentiment was also depressed by fears of changes in US monetary policy ahead of the release of jobs data there.
China Resources Land shed 4.2 percent to HK$23.05 and Hang Lung Properties fell 4.5 percent to HK$25.45.
The Bank of Communications lost 3.1 percent to HK$4.74 while ICBC fell 4 percent to HK$4.56 as doubts persisted over the strength of China's banking system.
"There is little doubt that the road has narrowed for all banks in China, and that the (People's Bank of China) intends applying more rigorous regulation," China Galaxy International wrote in a note to clients Wednesday seen by Dow Jones Newswires.
"But there is little ground to fear a banking collapse, given the liquidity in the broad banking system," it added.
Chinese shares ended down 0.61 percent. The benchmark Shanghai Composite Index fell 12.29 points to 1,994.27 on turnover of 76.7 billion yuan ($12.5 billion).
Dealers are also on edge before the release of fresh China indicators next week, fearing more bad news following this week's downbeat manufacturing activity reports.
"Worries over the domestic economy and unreleased economic data continued to affect sentiment," Zheshang Securities analyst Zhang Yanbing told AFP.
There were also worries the re-launch of government bond futures, reportedly just approved by Beijing, will drain funds from the stock market, analysts said.
State media, which quoted unnamed sources, gave no date for the re-introduction of the financial product, which has been banned since 1995 following a trading scandal.
Financial stocks led the declines in Shanghai.
New China Life Insurance slumped 5.74 percent to 23.01 yuan and China Citic Securities dropped 2.16 percent to 9.97 yuan.
Property developers also lost ground, with Gemdale dropping 3.06 percent to 6.65 yuan and Poly Real Estate falling 2.13 percent to 9.66 yuan.
Among rare earth producers Baotou Steel Rare-Earth lost 3.85 percent to 19.98 yuan and Xiamen Tungsten fell 2.94 percent to 26.08 yuan.
--- Dow Jones Newswires contributed to this report ---