(Bloomberg) -- The worldwide slump in technology stocks deepened Tuesday, with investor angst over inflation and stretched valuations adding to fresh signs of regulatory scrutiny in China.Losses in Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. helped send MSCI Inc.’s gauge of Asian tech stocks to its biggest drop since Feb. 26, while futures on the Nasdaq 100 slumped in Asia after the underlying index’s 2.6% slide on Monday.The Hang Seng Tech Index sank as much as 4.5%, extending its tumble from a February high to about 30%. Meituan drove declines after the Chinese e-commerce giant’s business practices were criticized by an influential consumer advocacy group, just days after the company’s CEO shared and then deleted a poem on social media that some interpreted as a veiled criticism of Beijing.Global technology stocks benefited from lower interest rates and emerged as investor favorites last year, when the pandemic stoked demand for online services. Now concern is mounting that commodity-fueled inflation will prompt central banks to tighten monetary policy, denting the appeal of stocks whose valuations often hinge on earnings prospects far into the future.With the Nasdaq 100 still trading within 5% of its all-time high last month, some market participants see a good window to take profits.Investors “continue to place their focus on the inflation narrative, with rising commodities prices and chip shortages in play,” said Yeap Jun Rong, a market strategist at IG Asia Pte. “Concerns of higher inflation may weigh on growth stocks, considering that much of their value may come from future earnings.”Broader MarketTuesday’s tech rout weighed heavily on the broader equity market, with the MSCI Asia Pacific Index slipping about 2% and heading for its lowest close since March 31.MSCI’s broadest measure of world equities fell for a second day. That’s after hitting another record just last week after surprisingly weak U.S. jobs data eased some fears about inflation and a cutback in stimulus.“Investors’ tendency to look at just the good side of things is quickly fading,” said Shogo Maekawa, a strategist at JPMorgan Asset Management in Tokyo. “People were inclined to buy technology stocks even after weak U.S. jobs data on the view that any exit in monetary policies is far away. But now, a deep-rooted concern over inflation is leading to declines in technology stocks.”Chinese tech giants have borne the brunt of the sector’s retreat this month, after regulators expanded an antitrust crackdown and announced steps to rein in the companies’ fast-growing finance units.Meituan’s stock plunged as much as 8.7% on Tuesday, taking the slump over two days to 15% after the Shanghai Consumer Council released criticism late Monday on issues that hurt consumer rights.Herald van der Linde, HSBC Holdings Plc’s head of Asia Pacific equity strategy, says they went neutral on China’s internet sector in November arguing that this might be the “single biggest issue” in 2021.“Sometimes, Asian stock markets get carried away by what we can call ‘big market delusions,’ they believe that growth in sectors will continue,” he said. “But then, these stocks can turn suddenly and de-rate even while growth remains strong.”(Updates with more comments in the last two paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.