A key gauge of Chinese stocks was on track to enter a bear market as a weak economic recovery and tensions with the US left traders with little reason to buy.

The Hang Seng China Enterprises Index dropped as much as 0.7% on Tuesday, marking the fifth day of declines and taking its losses from a Jan. 27 peak to about 20%. Meituan and Tencent Holdings Ltd. were the biggest drags.

The grim milestone deals a blow to investors who’d been betting on a revival after the reopening rally flopped at the end of January. Some China bulls are retreating in frustration, trimming portfolio allocations as they come to terms with a lackluster economic recovery and modest earnings.

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In a sharp reversal of fortunes from earlier this year — when buy calls were dominant — investors see a lack of catalyst for gains as the post-Covid recovery sputters and regulatory uncertainties still abound. Tussles with US on a wide range of issues continue to make investors wary, with Beijing’s rejection of a US request on a defense chiefs meeting adding to the jitters.

READ: China Spurns US Defense Chiefs Meeting Amid Sanctions Snag

The HSCEI gauge has lost about half of the gains seen during November-January. While some sectors related to artificial intelligence and state-owned enterprises have seen bouts of rallies, they haven’t been enough to lift the broader market.

The onshore CSI 300 Index was down as much as 0.5%, extending losses after wiping out all its gains for 2023. The Hang Seng Index lost 0.7%.