The Hang Seng index fell 0.2 percent to 20,562.3 points, with the China Enterprises index of top locally listed mainland firms dropping 0.5 percent.
On the mainland, the Shanghai Composite fell 0.9 percent, while the CSI300 index was off 1.3 percent.
Trading activity was sluggish with Hong Kong turnover falling to HK$46 billion, or 16 percent below an already depressed 20-day average, suggesting no rush for the exits but little buying interest either outside of news-driven stocks.
General caution means a lot of investors are just sitting on the sidelines, said a Hong Kong-based trader at an American brokerage.
But light volumes show no signs of panic, so it will be short-term trading with the chance of an equally swift rebound, said the trader.
Excluding three share placements on Monday, short-selling accounted for about 9.2 percent of total turnover, according to data from the exchange, which remains above average levels for Hong Kong and suggests a positive data surprise could prompt a bout of short-covering.
The Hang Seng could remain weak in the near term, though, as the next significant support on the charts, the 200-day moving average, is currently just below 20,000, is another 2 percent away.
While banks were the biggest drags on the day as investors booked profits following recent gains, cement stocks also tumbled following poor week-on-week pricing data from China released on Monday.
China National Building Materials fell 5 percent and was the top loser on the China Enterprises index, followed by another cement manufacturer Anhui Conch which fell 3.9 percent.
Aluminum Corp of China shares came under pressure after the Mongolian government said it has suspended exploration and mining licenses for SouthGobi Resources' Ovoot Tolgoi mine.
Earlier this month, Chalco said it would buy Ivanhoe Mines' SouthGobi stake. Ivanhoe owns 57.6 percent of SouthGobi.
SouthGobi shares fell 10 percent, while Chalco lost 1.6 percent.
Chongqing Rural Commercial Bank fell 6.6 percent, bringing its losses on the week to 14.3 percent as its shares slumped to a 4-1/2 month low.
Reports on local Chinese online portal Sina.com said that Chongqing's government had urged a complete investigation into local government debt since late March, according to a Credit Suisse research report.
Shares of Foxconn Holdings were hit by overnight weakness in shares of Apple Inc which fell for the fifth successive session on Wall Street. Foxconn, already suffering as major customer Nokia flounders, fell 6.5 percent to a six-month low.
Goldman Sachs cut its earnings forecasts for Foxconn for the next three years by 22 to 26 percent to reflect lower sales particularly to Nokia. The brokerage has a neutral rating on the stock.