The Fed is scheduled to begin a two-day meeting on later on Tuesday, with the latest monetary policy decision due on Wednesday. While the Fed is likely to leave interest rates unchanged, the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March.
Geopolitical tensions also remained on investors' radar after tensions grow between the United States and Russia over Ukraine, following the United States saying it would put its troops on "heightened alert" for a possible deployment due to escalating tensions on the Russia-Ukraine border.
Meanwhile, sentiments also dented amid uncertainty over the outlook for economic reopening with daily infections hitting more than 100 cases in the past two days, the highest in 18 months. Experts warned that stringent social-distancing curbs to stem the fifth wave were expected to hammer the economy this quarter.
At closing bell, the benchmark Hang Seng Index declined 1.24%, or 309.09 points, to 24,656.46. The Hang Seng China Enterprises Index sank 1.47%, or 129.19 points, to 8,658.11.
Shares of technology companies extended losses with global peers before a Federal Reserve meeting. Alibaba declined 1.9% while its health unit sank 7%. JD.com retreated 3%, while Meituan and Tencent fell by at least 0.6%.
Shares of property developers weakened on concerns a slowdown will worsen a cash crunch in the industry. Agile Group and China Resources Land both slipped more than 2.1%. Evergrande tumbled 6.5% as the home builder sought more time from creditors to implement a workout plan.
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