Hong Kong stocks closed at their lowest level this month on Tuesday, down 1.6 percent, with bellwether stock Hutchison sliding on growing perception the firm would post weak earnings later this week.
Asia tycoon Li Ka-shing's flagship Hutchison Whampoa Ltd fell 3.85 percent to HK$76.10 after Citigroup downgraded the firm to "sell" from "neutral", with earnings expected to be hit again by 3G telecoms start-up losses.
Sister property firm Cheung Kong (Holdings) Ltd fell 3.35 percent to HK$82.15. Citigroup also downgraded Cheung Kong to "sell".
"Citigroup is not going to get a Christmas card from Li Ka-shing this December. The Citigroup downgrade triggered the sell-off," said Francis Lun, general manager at Fulbright Securities.
The blue chip Hang Seng Index fell 244.74 points to 14,973.89, dipping below key psychological support at 15,000.
Volume was in line with recent averages with HK$24.1 billion ($3.08 billion) worth of shares traded.
Traders had been expecting a fresh correction to hit the market after recent hefty gains based on heavy fund flows and a robust earnings season thus far, but many anticipated the move would come after Hutchison posted earnings on Thursday.
China's largest oil producer, PetroChina Co Ltd, was among the few large cap gainers. Its parent firm CNPC on Monday launched a $4.18 billion dollar bid for PetroKazakhstan in what could be China's first successful take-over of a foreign-listed energy company.
The stock rose 1.6 percent to HK$6.40.
PetroChina is due to post solid earnings on Wednesday thanks to high world oil prices and strong demand in energy hungry China.
All but 3 out of the 33 Hang Seng composite stocks ended lower, with safe-haven utility Hongkong Electric Holdings Ltd the only gainer.
Utility CLP Holdings Ltd was flat at HK$45.50 after the firm posted a 10.6 percent rise in first-half net profit amid modest growth in electricity sales and contributions from overseas operations.
China's largest mobile phone provider, China Mobile (Hong Kong) Ltd, fell 3.15 percent to HK$33.85.
The firm has jumped 32.6 percent so far this year and sparked a rally earlier this month when it reported strong earnings.
Property shares also fell sharply with the Hang Seng Properties sub index down 2.3 percent.
Dealers said large property developers were likely to remain under pressure until the next government land auction in late September, which will give an indicator on developers' views on the strength of the market.