At closing bell, the benchmark Hang Seng Index declined 2.69%, or 650.07 points, to 23,520. The Hang Seng China Enterprises Index fell 2.19%, or 185.30 points, to 8,270.69.
Investors dumped risk assets and rushed to safe-haven assets amid heightened market anxiety after Russian President Vladimir Putin on Monday recognised two breakaway regions in eastern Ukraine as independent and ordered the Russian army to launch what Moscow called a peace-keeping operation into the area, upping the ante in a crisis that could unleash a major war. Washington and European capitals condemned the move, vowing new sanctions.
Investors worry that a war between Ukraine and Russia could prolong elevated inflation in developed economies by disrupting supplies of important commodities. Russia is among the world's largest suppliers of oil, as well as the biggest exporter of wheat, and a major metals producer. Ukraine is a major world supplier of corn and wheat.
Also, investors continue to try to assess by how much and how quickly the Federal Reserve will raise interest rates to tame inflation. Some Fed officials have pushed back against expectations that they will begin raising interest rates in March with a larger increase in the benchmark rate, while others have left the door open.
Alibaba Group Holding shares tumbled by as much as 5.3% in the biggest pullback in two weeks, before ending with a 3.1% loss. Chinese authorities are said to have asked state-owned firms and lenders to review their exposure to its 33%-owned Ant Group.
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