HONG KONG - Markets sank on Monday with traders left disappointed by a lack of policy announcements from China aimed at kickstarting the ailing economy.
Equities enjoyed a strong run-up last week, partly on the back of hopes that Beijing would unveil a raft of economic stimulus to go with two interest rate cuts.
Expectations have been high that officials would provide help for the struggling property sector and introduce measures to kickstart consumer activity.
While state media reported that Premier Li Qiang held a State Council meeting Friday, there were few details, dealing a blow to sentiment and leading to an unwinding of some of last week's rally.
"Government policy expectations were overdone," said Steven Leung, at UOB Kay Hian.
Still, with the world's number two economy struggling and key industries in trouble, leaders have plenty of work to do, analysts said.
"With all roads leading through China at the start of the week, investors' stimulus excitement could give way to the reality that there are no quick fixes to the property market or youth unemployment," said Stephen Innes at SPI Asset Management.
"Indeed, these areas of the economy could require a lengthy structural overhaul to repair. China needs to drive growth in sectors like technology, education, finance and entertainment, all of which have suffered under the security-focused leadership of Xi Jinping."
After Wall Street closed Friday in the red, Asian traders struggled.
Tokyo, Hong Kong, Shanghai, Seoul, Mumbai, Singapore, Taipei, Manila, Jakarta, Bangkok and Wellington were all down, though Sydney rose.
Oil prices fell around one percent on the lack of policy direction out of China.
London and Paris opened lower, while Frankfurt drew back after striking a record high on Friday.
Traders are also keeping tabs on comments from Fed officials after last week's decision to hold rates.
Several decision-makers lined up Friday to offer their views on the next move as they try to bring inflation down.