The Hang Seng Index fell 1.6 percent, or 422.26 points to 25,898.67 points, as of midday.
The mainboard turnover was about HK$80.19 billion. The Hang Seng TECH Index plunged 3.21 percent to 6,650.53.
Among the blue chips, China Petroleum and Chemical Corporation (0386), or Sinopec, was the top gainer, whose shares went up 3.26 percent, at HK$3.87.
Tencent (0700) slumped 5.7 percent to HK$494.6, the worst performer.
It fell sharply after authorities summoned gaming firms to ensure they implemented new rules for the sector.
Property stocks also dropped, as indebted developer Evergrande's shares slumped over 9 percent to a fresh six-year low.
Concerns over Evergrande's financial health deepened amid a slew of rating downgrades, and after financial intelligence provider REDD reported on Wednesday that the company plans to suspend interest payments due on loans to two banks on Sept. 21.
Further denting sentiment were remarks from several U.S. Federal Reserve policymakers, who signalled on Wednesday that monetary tapering could still start this year despite a slowdown in jobs growth in August and the impact of the recent Covid-19 resurgence.
The COVID-19 pandemic just became the worst pandemic in US history, surpassing the death toll from the 1918 Spanish flu pandemic.