At the close of trade, the Hang Seng index was down 119.92 points or 0.49pc, at 24,280.03.
The Hang Seng China Enterprises index fell 0.48pc to 9,850.07.
The sub-index of the Hang Seng tracking energy shares dipped 0.7pc, while the IT sector dipped 1.63pc, the financial sector ended 0.04pc higher and the property sector dipped 0.82pc.
The top gainer on the Hang Seng was China Mobile Ltd , which gained 3.22pc, while the biggest loser was Shenzhou International Group Holdings Ltd, which fell 3.75pc.
Leading the decline, the Hang Seng IT index dropped 1.6pc, with Semiconductor Manufacturing International Corp's skidding 7pc.
A US State Department official said the rule, which currently includes chips designed by Huawei and doesn't cover shipments if they are sent directly to the company's customers - will be watched by regulators and "certainly make any changes that we think are necessary."
Investors also awaited China's parliamentary meeting, where Premier Li Keqiang is expected to make a state-of-the-nation style address and reiterate Beijing's long-standing vow to keep the yuan stable.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.19pc, while Japan's Nikkei index closed down 0.21pc.
The yuan was quoted at 7.1004 per US dollar at 0810 GMT, 0.1pc weaker than the previous close of 7.093.