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European stocks followed a decline in Asia on Monday as fears about the health of China’s real estate sector added to investors’ worries about a slowdown in global economic growth.

The pan-European Stoxx Europe 600 fell 0.3 percent at the opening bell, as did France’s Cac 40 and Germany’s Dax. Materials and consumer discretionary stocks led the decline in the region.

The moves were reflected in Chinese markets, where declines in the country’s once-dominant real estate sector pushed Hong Kong’s Hang Seng down 1.8 percent and the CSI 300 down 0.7 percent.

Markets were rocked by news that Chinese real estate giant Evergrande was unable to issue new debt due to an investigation into its main subsidiary, Hengda Real Estate Group. Its shares fell by almost a fifth, two days after the company said it would cancel some creditor meetings to reassess the terms of its restructuring.

The downturn impacted China’s weakening real estate market, with developer Longfor down 7.1 percent and Country Garden down 6.7 percent. The Hang Seng Properties Index fell 4.3 percent in Hong Kong.

China’s real estate sector, which typically accounts for more than a quarter of activity in the world’s second-largest economy, has stalled since the start of the year as consumer demand struggled to recover after three years of strict pandemic restrictions.

Concerns about China’s economy added to already sour sentiment among traders as they digested the Fed’s latest forecast that interest rates would likely remain high next year as the central bank worked to bring inflation back to its 2 percent target .

Benchmark 10-year U.S. Treasury yields rose 0.04 percentage point to 4.48 percent on Monday, after hitting their highest level in 16 years last week. Bond yields rise when prices fall.

Investors prepared for euro zone inflation data this week, hoping to gauge policymakers’ plans for future interest rates as concerns grow that recent oil supply cuts could trigger a second wave of inflation worldwide.

Brent crude, the international oil benchmark, rose 0.9 percent on Monday to trade at $94.11 a barrel, while the U.S. equivalent West Texas Intermediate rose 0.7 percent to $90.72 a barrel . Both remained near their highest levels since November 2022.

Contracts tracking Wall Street’s benchmark S&P 500 and those tracking the technology-focused Nasdaq 100 both rose 0.4 percent ahead of the New York open.

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