Hong Kong stocks extended losses Thursday as fresh U.S. sanctions on China- and Hong Kong-linked entities over alleged ties to Iran's military and escalating tensions in the Middle East weighed on sentiment.

The Hang Seng Index fell 0.7%, or 158.67 points, to close at 24,249.29, while the Hang Seng China Enterprises Index dropped 1.2%, or 101.65 points, to finish at 8,217.08.

The U.S. government on Wednesday imposed sanctions on 11 individuals and entities, including several in China and Hong Kong, for allegedly supporting weapons procurement for Iran's Islamic Revolutionary Guard Corps and military.

Nine of those targeted were China- and Hong Kong-based individuals and companies, while another Hong Kong firm was accused of operating within Iran's covert banking network, according to the U.S. Treasury.

Meanwhile, Washington launched a fresh round of strikes against multiple targets in Iran, according to the U.S. military, prompting Tehran to announce the full closure of the Strait of Hormuz.

In corporate news, Alibaba (HKG:9988) closed over 5% lower after Beijing regulators called in major e-commerce platforms over alleged misleading promotions during the annual "618" shopping festival.

JD.com (HKG:9618) closed nearly 3% lower after being named among the platforms summoned by regulators.