Hong Kong stocks declined on Wednesday, with tech shares leading the drop in light trading before Chinese markets reopen from the National Day holiday.

The benchmark Hang Seng Index slipped 128 points, or 0.48 percent, to close at 26,829, its third straight session of declines since hitting a fresh four-year high on October 2.

The Hang Seng China Enterprises Index fell 0.52 percent to end at 9,523 while the Hang Seng Tech Index fell 0.55 percent to end at 6,514.

Investors sought out less risky assets, with Asian stocks down 0.6 percent following a sluggish session overnight in the United States. Spot gold climbed to a record US$4,000 per ounce level as investors sought safety.

Heavyweights Alibaba lost 1.6 percent and Baidu lost 3 percent.

The decline followed a report that US lawmakers were calling for broader bans on chipmaking tool sales to China, rather than narrower restrictions on specific Chinese chipmakers.

Also weighing on Hong Kong markets, mainland developers slipped 1.3 percent, with developer Longfor down 4.5 percent.

The mood was "mixed and cautious" with the mainland still on holiday, Wee Khoon Chong, APAC market strategist at BNY, wrote in a note.

Investors are also watching out for a key policy meeting of China's ruling Communist Party this month, which will map out the country's social and economic development over the next five years, according to UBS.

The mainland's financial markets will resume trading on Thursday following the eight-day National Day holidays.

The movements came on a day when Vietnam was designated an emerging market by a major index provider for the first time, a long-awaited upgrade that could accelerate foreign investment into one of Southeast Asia's fastest growing economies.

FTSE Russell is reclassifying Vietnam as a "secondary emerging market", a designation that will put it in the same group with China and India when it takes effect in September, the index provider said.

The upgrade from "frontier" status, which is subject to an interim review in March, comes as Vietnam's benchmark stock index has soared over 30 percent in the last year.

"FTSE Russell recognises the progress made by the Vietnamese market authorities in evolving its market... and establishing a formal process for handling failed trades," the company said. (Agencies/Xinhua)