Uncertainty over the path of U.S. monetary policy also weighed on market, as investors awaited more cues from the minutes of the Federal Reserve's November meeting due later this week.
At closing bell, the benchmark Hang Seng Index stumbled 336.63 points, or 1.87%, to 17,655.91. The Hang Seng China Enterprises Index dropped 123.50 points, or 2.02%, to 6,001.90.
China is grappling with its worst outbreak in seven months, which had seen several cities placed under lockdown. Beijing's most populous district urged residents to stay at home on Monday, while local authorities in the Baiyun District of the southern Chinese city of Guangzhou locked down the area for five days as COVID-19 cases continue to mount. Many businesses in the district were shut and schools shifted classes online.
The Beijing government reported on Sunday that one person had died from the coronavirus, the first in mainland China in around six months amid rising infections. Cases rose to 26,824 nationwide on Monday from 24,215 a day earlier, according to government data.
Hawkish signals from the Federal Reserve drove up fears of a potential U.S. recession, with members of the central bank indicating that it will not curb its rate hikes until inflation is much closer to its annual target range. The minutes of the Fed's November meeting, due later this week, are expected to shed more light on the path of U.S. monetary policy.
Among blue chips. Alibaba Group slipped 4.8% to HK$76.15 while Tencent fell 1.6% to HK$283.20 and Meituan plunged 4.9% to HK$152.50. Casino operator Sands China sank 8% to HK$18.06 while peer Galaxy Entertainment dropped 5.4% to HK$43.40.
Shares of real estate developers tumbled as the wealthy middle class cashing out and leaving the country. Longfor slid 2.8% to HK$19.54, while Country Garden lost 5% to HK$2.48.
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