Hong Kong stocks fell to a six-week low on Thursday, as disappointing China export data hit already fragile sentiment amid rising profit-taking pressure and global policy uncertainty.
China stocks were roughly flat, as growing concerns over yuan depreciation were partly offset by reform hopes that sent shares of several state-owned companies soaring on their restructuring plans.
Hong Kong's Hang Seng index dropped 1.1 percent, to 23,144.06 points, while the Hong Kong China Enterprises Index lost 1.3 percent, to 9,552.26.
The Hong Kong market's fall - it's down 3 percent this week and on track for a fourth straight decline - was partly triggered by profit-taking following last quarter's 12 percent jump.
But analysts say other factors are worries about the U.S. presidential election, a possible U.S. rate hike soon and the prospect of tough negotiations on Britain breaking away from the European Union (EU).
Investor confidence was further dented on Thursday, after data showing China's September exports fell 10 percent from a year earlier, far worse than expected, raising concerns over China's economic health.
Capital Economics said the data is "raising questions over the strength of the recent recovery in domestic demand."
"This could be an early sign that the recent recovery in economic activity is losing momentum," wrote China economist Julian Evans-Pritchard, who also cautioned against reading too much into a single data point given the volatility of trade figures.
Worse-than-expected export figures, which point to weaker demand for Chinese goods, also deepened concerns over the value of the yuan, which hit a fresh six-year low against the U.S. dollar on Thursday.
All main sectors fell in Hong Kong, with energy and financial shares leading the decline.
Yuan depreciation would reduce the appeal of Hong Kong-listed companies whose assets are mostly denominated in yuan.
In China, both the China CSI300 stock index and the Shanghai Composite Index ended the morning session flat.
Partly aiding sentiment were hopes that more listed state-owned enterprises (SOE) would benefit from Beijing's plans to reduce massive corporate debts through restructuring.
State-owned China First Heavy Industries and First Tractor, which have unveiled their plans this week, both shot up 10 percent on Thursday morning.