Stocks in Asia were dragged down by losses in Hong Kong and China amid concern over tighter regulation on the gaming industry and fears the Chinese government’s efforts to bolster the economy are insufficient.

The Hang Seng Tech Index slid as much as 3.5%, putting it on course for the lowest close since November 2022. The three biggest drags on the MSCI Asia Pacific Index were Tencent Holdings Ltd., Alibaba Group Holdings Ltd. and Meituan, all Chinese tech firms. Benchmark stock indexes also fell in South Korea and Australia.

Investor sentiment remains quite negative in China despite a rally in global stocks during the past two months of 2023, Nomura Group analysts including Chetan Seth in Singapore wrote in a client note. “In China, there have been more signs of support for the economy, but equity investors still do not appear convinced,” they said.

European equity futures also edged lower before euro-zone retail sales and consumer confidence data that may give a better guide on the region’s economic recovery.

US equity futures were little changed after the S&P 500 closed marginally higher Friday after payroll growth beat expectations but the service sector slowed. Japanese financial markets were shut Monday for a holiday.

The dollar edged higher versus most of its Group-of-10 peers, while the yen strengthened ahead of Tokyo inflation data due Tuesday. Treasury 10-year futures dropped. There’s no trading of cash Treasuries in Asia due to the Japanese holiday.

Rate-Cut Bets

Global stocks slid the most since October last week as markets were rattled by a deluge of corporate issuance and the Federal Reserve indicated it was in no rush to cut interest rates.

Still, markets are pricing in rate cuts by March and traders are now looking to the US inflation print due Thursday for the next major guide for the Fed outlook. The inflation data is expected to see the underlying measure ease further to 3.8% year-on-year in December from 4% in the month prior, according to a Bloomberg survey.