Asian stocks opened sharply lower on Wednesday, after Wall Street sold off as much as 2 per cent overnight amid a plunge in oil prices.
Japan's Nikkei 225 dropped 2.91 per cent, while the Topix fell 3.06 per cent. Across the Korean Strait, the Kospi slumped 1.13 per cent in morning trade.
In Singapore, share prices tumbled by 1.09 per cent, with the benchmark Straits Times Index at 2,551.23 in early trade, The Straits Times reported.
Australia's ASX 200 traded down 1.65 per cent, with all sectors in the red. The energy sector was down 3.30 per cent, while financials and materials saw losses of 1.91 and 2.78 per cent, respectively.
Santos drops 6 per cent as oil declines further
Two consecutive sessions of declines in overnight oil prices have erased most of last week's four-day gain, and was partly responsible for the drop in equities.
During Asian trade, West Texas Intermediate (WTI) futures fell 33 cents, or 1.10 per cent, to US$29.55 (S$42.27) a barrel, after dropping 5.5 per cent in US trading hours. Overnight, the global benchmark Brent futures for April delivery slid US$1.79, or 5.23 per cent, to US$32.43.
Evan Lucas, market strategist at spreadbetter IG, said in a morning note that the "supply side will continue to cause price spikes on 'possible coordination' [between OPEC and Russia] rather than actual action. Remember - talk is cheap."
Oil got a boost last week on comments from Russia that OPEC's largest producer, Saudi Arabia, was considering a 5 per cent production cut.
Energy plays were broadly negative across the board with Santos losing 6.51 per cent, Oil Search down 1.73 per cent and Woodside Petroleum shedding 2.89 per cent.
Japan's Inpex fell 1.68 per cent and Japan Petroleum declined 3.54 per cent while South Korea's S-Oil was down 0.38 per cent.
NAB, one of Australia's so-called big four banks, was one of the biggest losers on the index, down 5.59 per cent. Reports said the bank set a final offer price for its Clydesdale and Yorkshire Banks initial public offering in the United Kingdom at 100 pence (US$1.44) a share.
Most mining stocks were down, with BHP Billiton losing as much as 4.96 per cent in early trade.
The Aussie dollar-US dollar pair traded nearly flat at 0.7032.
Japanese exporters were mostly down with major names such as Toyota, Nissan and Honda losing between 4.35 and 4.87 per cent. The dollar-yen pair traded lower by 0.13 per cent at 119.78; a stronger yen is a negative for export stocks as it reduces overseas revenue when converted to local currency.
Shares of Nintendo, however, traded higher by 1.02 per cent. On Tuesday, after market close, the video game-maker released its third fiscal quarter earnings, with net profit for the period falling 36 per cent on-year to 29.1 billion yen (US$241.3 million), down from 45.2 billion, due to a lack of high-profile game titles that affected sales.
Nomura shares tumble 10.8 per cent
Nomura shares tumbled 10.75 per cent after reports said the company's net profit for the October-December quarter fell 49 per cent on-year to 35.4 billion yen.
In South Korea, blue chip stocks were mostly down, with Samsung Electronics losing 1.04 per cent and Posco down by 1.42 per cent. Kepco, on the other hand, saw gains of 0.19 per cent.
Investors will be watching for likely stimulus to be unveiled by the South Korean government as cooling inflation and falling export numbers threaten the economy's prospects. Reports showed South Korea's January inflation was up by only 0.8 per cent on-year, slightly lower than market expectations. In December, by comparison, the consumer price index rose 1.3 per cent.
Over on Wall Street
On Wall Street, the Dow Jones industrial average closed down 295.64 points, or 1.80 per cent, at 16,153.54, while the S&P 500 was down 36.35 points, or 1.87 per cent, at 1,903.03. The Nasdaq composite slipped 103.42 points, or 2.24 per cent, to 4,516.95.
In China, the Caixin January services purchasing managers' index (PMI) is due.
It's also the middle of Asia's earnings season, with a number of notable companies releasing their figures later in the day, including Panasonic, Denso, Hitachi, Lenovo and South Korea's Shinhan Financial Group.