hang seng
Floor traders at work during the launch of Shenzhen Connect at the Hong Kong Exchanges in Hong Kong, China. REUTERS

Hong Kong equities fell for a third session on Friday, losing nearly 2 percent, following a sell-off in the U.S. and Europe on escalating geopolitical tensions.

Global risk appetite faltered amidst increasing geopolitical worries regarding North Korea, resulting in investors piling onto havens such as U.S. Treasuries, gold and the yen.

U.S. President Donald Trump stepped up his campaign of pressure, warning the North Korea regime not to follow through with a missile test near Guam and promising massive response to any strike against America or its allies.

Trump's second warning has shaken markets that have been largely resilient this year.

At 0433 GMT, the benchmark Hang Seng Index fell 1.98 percent or 533 points to 26,911 while China's Shanghai Composite Index was down 1.4 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.55 percent, its biggest one-day loss since mid-December. It is heading for a 2.5 percent drop for the week.

Japanese markets were closed for a holiday.

Among the laggards, Tencent Holdings fell 3.9 percent, China Construction Bank dropped 1.7 percent while Ping An Insurance Group lost 2.5 percent.

In U.S. markets, the S&P 500 declined 1.5 percent on Thursday for its steepest slide since May 17 and the lowest close since July 11.

Markets are now awaiting U.S. consumer price data for July, due later in the session.