The benchmark Hang Seng Index tumbled by 3.54 percent, or 926.70 points, to close at 25,266.37.
The benchmark Hong Kong equity gauge has tumbled 16% this year as fears of a trade war between the United States and China spurred an exodus from what was the world's best performing market as recently as January. For the Shanghai Composite, the technicals show that price has now cracked the support seen from February and March 2016. Shanghai stocks have declined 7.6 percent this month.
The benchmark Hang Seng Index traded between 25,286.86 and 25,835.76.
Stocks on the Chinese mainland plummeted sharply this morning, with the Shanghai Composite Index down by 5.19 percent since opening and the Shenzhen Stock Exchange down 5.32 percent and continuing to drop as of 3pm today.
BAIC Motor Corp. was one of Thursday's biggest decliners in Hong Kong, heading for its worst ever loss on concern Mercedez-Benz AG may raise its stake in the company.
The smaller Shenzhen index and the start-up board ChiNext Composite index were also crunched by big losses, down 6.45 per cent and 6.3 per cent, respectively. The volume in the previous trading session was 19.72 billion.
The index fell for the first four days of this week, mainly due to the tumble of oil and gas and banking stocks when investors simultaneously sold them to take profit.