Hong Kong: A rout in technology stocks, emerging market contagion, currency weakness, an economy under threat. Welcome to Hong Kong, where just about every problem afflicting global equity investors has found a foothold.

The Hang Seng Index’s 0.7% slide Tuesday tipped it into a bear market, extending its loss since a January peak to more than 20%. Already reeling from a sell-off in Internet and tech firms as well as concerns over China’s slowing growth, Hong Kong is now caught in an emerging-market exodus first sparked by currency crises in Latin America and Turkey. The MSCI Emerging Markets Index is down 21% from 26 January.

Traders predict more money will bleed out of funds that follow the MSCI EM Index around 21 September, when options and futures tied to the gauge expire. That tends to increase volume as global money managers, who use those derivatives to hedge risk or bet on the direction of a large basket of stocks, opt to switch or defend their positions before the next quarter. Firms with a primary listing in Hong Kong make up 23% of the emerging market benchmark.

“These markets are getting hit hard with the flow, and I wouldn’t be surprised to see more switching around the September expiry," said Mark Tinker, head of Framlington Equities Asia at AXA Investment Managers in Hong Kong. “We’re waiting for this to stabilize first but when it does, people will realize that it’s foolish to bundle North Asia together with the rest of EM."

Indiscriminate selling across emerging markets has hit Asian stocks particularly hard, thanks in part to the $2 trillion that follows MSCI’s benchmark index. All the bottom 38 performers in the past three months are firms based in Hong Kong, China and Taiwan, which were among the most-owned stocks earlier this year. In March, Taiwan Semiconductor Manufacturing Co. featured in 63% of emerging-market portfolios and Tencent Holdings Ltd. was in 53%, according to eVestment data.

The rotation around the last index options expiry in June was so aggressive that the largest exchange-traded fund tracking the index lost $5.4 billion that month, the biggest outflows since 2014. The Hang Seng Index is on track for its worst quarter in three years, when China’s chaotic yuan devaluation roiled markets around the world.

As volatility soars, calls to stay in cash are growing louder. Investors are preferring to ride out the sell-off in safety even though valuations across Asia are the cheapest they’ve been in years. The Hong Kong gauge trades at just under 10 times projected earnings, the lowest since 2016.

“A lot of players are on the sidelines—you don’t want to be caught on the wrong side of this one," said Stephen Innes, head of trading for Asia Pacific at Oanda Corp. in Singapore. “We were short the EM space but now we’ve flattened our positions. The flow is very one-directional now. I don’t think the outflows are over by any means."