The Hang Seng Index closed down 61.72 points at 18,891.14.
"The market has had a good run and investors are bound to take profits at this point," said Jackson Wong, investment manager at Tanrich Securities.
He said the local market also reflected the performance of overseas markets.
"The fall in markets overseas gave investors an excuse to sell," Wong said.
Dealers said recent share placements by companies such as Hang Lung Properties and China Power International also weighed on overall sentiment.
SHANGHAI
Share prices closed 0.68 percent lower on profit-taking after the Shanghai Composite index rose above the key 1,900 points level in early trade.
The Shanghai A-share Index fell 13.58 points to 1,979.10 and the Shenzhen A-share Index was down 10.43 points or 2.22 percent at 460.40. The Shanghai Composite Index, which covers A and B-shares, closed down 13.14 points or 0.69 percent at 1,883.35.
SYDNEY
Share prices rose 0.14 percent, edging ahead in a generally positive market as investors mulled the fallout from Bush administration's loss of control over Congress in the US mid-term elections.
The SP/ASX 200 was up 7.7 points at 5,436.7.
SINGAPORE
Shares closed flat after investors consolidated their positions.
The Straits Times Index closed 0.28 points higher at 2,745.31.
One dealer said the relatively lackluster performance resulted from a lack of strong leads after most companies announced their September-quarter earnings.
KUALA LUMPUR
Share prices closed up 0.23 percent at their highest levels in nine years on selective investor interest in blue chips.
The composite index closed the day 2.37 points higher at 1,022.30. It was the highest closing level since July 1997.
MUMBAI
Share prices closed up 1.11 percent at a record high on strong foreign fund buying in index heavyweights, led by optimism over sustained economic growth, dealers said.
The 30-share benchmark SENSEX index rose 145.42 points to 13,282.91. The previous record close was Monday when the index touched 13,186.89.
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