Hong Kong shares closed lower on Wednesday, dragged down by technology and healthcare firms, while elevated short-term Treasury yields potentially drained liquidity from the market.

The Hang Seng Index fell 1.6 percent to 25,628.74.

The Hang Seng Tech Index and the Hang Seng Healthcare Index slumped about 3 percent each.

Two-year US Treasury yields leapt to a 19-month high, potentially draining liquidity from emerging markets.

Analysts said the announcement of US Federal Reserve tapering next week is pretty much a done deal, markets have moved past taper-talk and are now focused on tightening.

Tech giants Alibaba Group, Meituan, Tencent Holdings declined between 3 percent and 5 percent.

The energy sub-index dropped more than 2 percent as shares of coal miners slumped.