Hong Kong and Shanghai shares fell on Friday despite China's decision to cut interest rates for the first time in three-and-a-half years to shore up slackening economic growth.
The benchmark Hang Seng Index eased 0.94 percent, or 175.95 points, to 18,502.34 on turnover of HK$53.45 billion ($6.90 billion).
China's central bank said Thursday it would cut the benchmark one-year lending rate by 0.25 percentage points, while the one-year deposit rate would fall by the same amount from Friday.
It also said it would ease restrictions on banks' deposit and lending rules to increase consumption.
"The fact that the interest-rate cut comes before Saturday's release of China's May economic data stokes fears that the economy may be in really bad shape," said Alvin Cheung, associate director at Prudential Brokerage.
The rate cut was overshadowed by Ben Bernanke's comments to Congress that he was upbeat about "moderate" growth in the world's top economy and was "prepared to take action" to provide support, but gave no hint of stimulus measures.
And in Europe Fitch slashed Spain's credit rating by three notches Thursday, from A to BBB -- just above junk -- warning the economy would likely stay in recession this year and next.
On the Hang Seng ICBC bank tumbled 4.9 percent to HK$4.26 and China Construction Bank dropped 4.0 percent to HK$5.28, Bank of China closed down 3.2 percent at HK$2.76 and Bank of Communications slumped 4.7 percent to HK$4.88.
Together, the four blue chips accounted for 133.20 of the index's 175.95 point drop.
Chinese shares closed down 0.51 percent. The Shanghai Composite Index, which covers both A and B shares, fell 11.68 points to 2,281.45 on turnover of 63.8 billion yuan ($10.1 billion).
"A 25 basis-point interest rate cut is far from enough to reverse the market's downtrend," Zhang Yuheng, an analyst at Capital Securities, told Dow Jones Newswires.
"Investor confidence remains so weak that the market will keep consolidating as long as there are no clear signs that China's economy is on the mend."
Banks led the declines owing to the rate cut. China Minsheng Bank fell 3.7 percent to 6.08 yuan and Industrial Bank dropped 3.5 percent to 12.61 yuan.
But property developers were mostly higher, with Shanghai Xinmei up 8.0 percent to 7.20 yuan and Vanfund Real Estate gaining 4.4 percent to 7.13 yuan.