Hong Kong stocks fell more than three quarters of a percent in quiet trade on Tuesday with investors eyeing growing expectations the US Federal Reserve will raise rates at their meeting next week.
Retail stocks provided a focus with cosmetics retailer Sa Sa International Holdings Ltd falling 7.5 percent to HK$3.07 on worries about its sales growth outlook after the long-anticipated opening of Hong Kong Disneyland.
But casual wear retailer Giordano International rose 2.67 percent to HK$4.80 as investors reassessed local retail stock valuations.
Sourcing and consumer products firm Li & Fung Co Ltd was a top blue chip gainer as investors eyed retail counters with an international presence and on talk the firm may be ready to make further acquisitions.
Li & Fung rose 6.04 percent to HK$17.55, tapping its highest levels in more than four and a half years.
"Basically you shouldn't be in (retail) stocks that are leveraged to mainland China visitor spending. It's not happening. Arrivals have been sluggish whereas domestic consumption has been strong," said Paul McKenzie, head of consumer research at CLSA.
The market shut before global casual wear retailer Esprit Holdings Ltd posted a 67 percent surge in full year profits, in-line with analyst expectations.
Esprit closed 0.96 percent lower at HK$61.85.
The blue chip Hang Seng Index fell 0.85 percent, or 129.23 points, to 15,070.
Traders expect the index to hold within a trading range of 15,000 to 15,300 until the outcome of a US rate setting meeting next week.
Volume was below recent averages with HK$14.46 billion (US $1.85 billion) worth of shares exchanged. Rate-sensitive property stocks were among the biggest losers as investors started to price in expectations for further interest rate rises.
Hong Kong rates often move in tandem with US rates due to the local currency's peg to the US dollar.
Large developer Sun Hung Kai Properties Ltd fell 1.3 percent to HK$81.75. The firm is expected to post a 57 percent jump in underlying net profit for its financial year later this week, but some analysts wonder how much development growth lies ahead.
Cheung Kong (Holdings) Ltd fell 1.7 percent to HK$84.50.
China enterprise stocks lost ground with commodity shares lower as the US dollar gained ground on rising interest rate expectations.
Gold mining firm Zijin Mining Group Co Ltd fell 3.57 percent to HK$2.02. Asia's largest oil refiner Sinopec Corp fell 2.14 percent to HK$3.42 as crude oil prices eased below US $63.15 a barrel.