Hong Kong shares sank early Wednesday, with investors taking some profit on the outperforming technology sector as the U.S. fiscal impasse sapped confidence that the world's largest economy will avert a debt default.
Chinese internet giant Tencent Holdings fell 2.6% after closing at a record high on Tuesday.
Gainers for the day were most Chinese property developers and some alternative energy counters. At midday, the CSI300 of the biggest Shanghai and Shenzhen A-share listings slipped 0.2%, while the Shanghai Composite Index inched down 0.1%.
The Hang Seng Index was down 0.6% at 23,047.1 points, while the China Enterprises Index of the top Chinese listings in Hong Kong sank 0.5%. Both have been in a tight trading range for almost two weeks.
"There's not much fresh flows, just a whole lot of rotational movement," said Jackson Wong, Tanrich Securities vice-president for equity sales.
"It's going from tech to clean energy and some Chinese property names today," Losses for Tencent on Wednesday tracked steep overnight losses for sector rivals listed in New York.
The stock is still up 67% for the year, compared with the 1.7% gain for the Hang Seng benchmark. Geely Auto sank 3.4% after the private equity arm of Goldman Sachs sold its remaining stake in the Chinese automaker at a discount of up to 7%, Thomson Reuters IFR reported.
There were strong gains for China Longyuan and Huaneng Renewables, moving 5.2 and 2.1% respectively in heavy volumes after September wind power farm output in the mainland was higher than expected. Citi analysts said in a note on Wednesday that new policies in the next two quarters may help improve grid efficiency.
Lingering hazardous levels of pollution in China also helped Beijing Jingneng Clean Energy climb 4.7% to its highest since late July, while waste management firm China Everbright International rose 3.1%.
The Chinese property sector gained in Hong Kong after China Vanke, the country's largest developer by sales, followed the lead of Country Garden in reporting solid September sales figures.
But while Country Garden shares in Hong Kong rose 1.6%, investors in the mainland took profit on the property sector after strong Tuesday gains. Vanke sank 1.9% in Shenzhen.
Strength in the Chinese banking sector helped moderate losses in the A-share market after the official Shanghai Securities News reported on Wednesday that China's four major banks issued new loans of 276 billion yuan ($45 billion) in September, the third-highest monthly total this year.
The same newspaper also reported on Wednesday that China's banking regulator plans to more than triple the minimum registered capital requirement for new wholly-owned foreign banks and joint-venture banks.
A batch of official China economic data could start this week. September figures for money supply and loan growth are due by Oct. 15, trade data on Oct. 12, inflation on Oct. 14, with third quarter GDP due Oct. 18.