After a healthy performance on Friday, Asian investors struggled to maintain momentum after big losses in New York, where the Nasdaq lost more than 2%.
The selling came after a report showed activity in the key services sector hit a 25-month low in February, while separate data indicated consumer sentiment dived almost 10% from January.
Meanwhile, another study revealed that expectations for inflation hit a three-decade high.
The readings follow a recent run of figures pointing to a softening of the labour market and prices continuing to rise faster than the Federal Reserve (Fed)’s target rate.
There have been increasing fears since Donald Trump regained the US presidency that his plans to impose import tariffs, and slash taxes, immigration and regulations would reignite inflation.
That has led investors to scale back their expectations for how many interest rate cuts the Fed will make this year.
Hong Kong retreated after Friday’s blockbuster rally fuelled by tech firms, particularly an eye-watering rise of more than 14% in ecommerce titan Alibaba.
Shanghai, Seoul, Mumbai, Taipei, Manila, Jakarta, Bangkok and Wellington were also in the red.
Sydney and Singapore also edged up but the rest of the region struggled.
London edged up at the open but Paris slipped.
Frankfurt’s DAX index and the euro were boosted by news that conservatives won a closely watched election in Germany, with leader Friedrich Merz urging the speedy formation of a new coalition government.
Merz’s CDU/CSU alliance won more than 28%, according to projections, crushing the Social Democrats (SPD) of outgoing chancellor Olaf Scholz, which came third.
But there was some nervousness after the far-right Alternative for Germany (AfD) came second, almost doubling its score to more than 20%.
Merz said he wanted to quickly form a government, warning that as Trump is driving rapid and disruptive changes, “the world isn’t waiting for us”.
“Markets will like that, presuming it is achieved,” said National Australia Bank’s senior forex analyst Rodrigo Catril.
But SPI Asset Management’s Stephen Innes said: “With these results, the next government’s first priority won’t be fixing Germany’s stagnating economy – it’ll be damage control.
“Expect a hard pivot toward stricter immigration policies, not because of economic necessity but because mainstream parties are now in full-blown panic mode over the AfD’s rise,” Innes said.
Oil prices extended losses after dropping as much as 3% on Friday as the weak US data sparked demand fears, while there are also growing expectations Trump will ease the sanctions that have limited Russian oil exports.