Also, weighing risk sentiments was geopolitical tensions ahead of the Ukraine war's first anniversary and signs that Beijing wants to play a more active role in the Ukraine conflict.
At closing bell, the benchmark Hang Seng Index fell 105.65 points, or 0.51%, to 20,423.84. The Hang Seng China Enterprises Index was down 92.31 points, or 1.33%, to 6,832.76.
Market participants were nervous as sabre rattling by both US President Joe Biden and Russian leader Vladimir Putin on the first anniversary of Russia's invasion of Ukraine.
Ratcheting up geopolitical tensions, Russian President Vladimir Putin suspended Russia's last major nuclear arms treaty with the United States.
Back to home, Financial Secretary Paul Chan Mo-po handed out HK$5,000 of consumption vouchers to each resident, versus HK$10,000 in the previous round, when he presented the city's 2023 budget on Wednesday. Other one-off measures included a smaller cut in salaries tax ceiling, and rate concessions for residential properties. Other tax sweeteners included a reduction of profits tax in 2022-23 for small-medium enterprises, benefiting 134,000 companies, a move that will cost the government HK$720 million in income. The city is studying a proposal to keep the market running during extreme weather such as typhoons. The local economy is forecast to expand by 3.5% to 5.5% this year after the border reopening with the mainland.
Among blue chips, Carmaker BYD lost 1.3% to HK$224.40 while hotpot restaurant chain Haidilao slipped 0.6% to HK$19.08. Limiting losses, property developer Sun Hung Kai Properties surged 0.8% to HK$111.90 while Henderson Land climbed 1.6% to HK$27.90. HSBC surged 5.3% to HK$60.65 as the lender signalled higher dividend payout, while its unit Hang Seng Bank added 2.7% to HK$131.60.
Most Hong Kong developers advanced. Chan proposed tweaks to the city's variable property tax regime to ease the financial burden on first-time homebuyers, a move that will cost the government HK$1.9 billion annually.
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