The benchmark Hang Seng index closed 0.34 percent, or 47.67 points, lower, at 13,967.82.
Turnover was HK $15.3 billion ($2 billion), compared to HK $17.1 billion on Wednesday.
"There were quite a few gains before and after the Lunar New Year holiday, so the market is now in a consolidation phase," said Ben Kwong, associate director at KGI Asia Ltd.
The market staged a post-Lunar New Year holiday rally on Monday, driving the key blue chip index above 14,000 for the first time since January 4.
"We will probably see renewed buying interest around the land auction next Tuesday," Kwong added.
Hong Kong's auction of a non-residential property site is expected to attract fierce bidding as land-starved developers scramble to replenish their inventories.
"The market is waiting for fresh news, and investors may also wait until HSBC's results at the end of the month before taking positions," said Y.K. Chan, strategist at Phillip Securities.
Index heavyweight HSBC Holdings, which is due to report its results on February 28, ended unchanged at HK $133.
A jump in oil prices helped boost oil stocks, lifting China's top offshore oil and gas producer CNOOC Ltd by 1.81 percent to HK $4.225, and Asia's largest oil and gas producer, PetroChina Co Ltd, by 1.09 percent to HK $4.65.
Shares in A-Max Holdings Ltd rose 3.75 percent to HK $1.66 after it said it had agreed to double its stake in Macau gaming and entertainment firm Greek Mythology (Macau) Entertainment Group Corp Ltd to 13.8 percent.
Asia-focused bank Standard Chartered fell 0.34 percent to HK $146, a day after it reported a 39 percent rise in 2004 profit that met market expectations.
Chinese telecom equipment maker ZTE fell 1.27 percent to HK $27.20 after denying a report that it was pursuing a purchase of Siemen's loss-making cellphone handset business.