Property and banking shares suffered the most in yesterday's 2.56 per cent plunge by the Hang Seng Index.
Investors sold on fears that rising US bond yields would prompt an increase in the territory's rates.
US 30-year bond yields surged toward the 7.2 per cent level on Friday, up from about 6.94 per cent, following the release of stronger than expected employment figures.
Yesterday, the HSI closed at 10,890.05, down 287.08 points. Turnover was a heavy $6.24 billion, compared with $4.29 billion on Friday.
Losers swamped advancers by 460 to 74, with 296 stocks unchanged.
Despite the sharp losses, many brokers and analysts were confident that the fall represented a short-term setback, pointing to an attempted rebound in the late session as an indication of firm sentiment.