HONG KONG - Nervous Asian investors resumed selling on Wednesday as the optimism that had fuelled this month's rally was broken by another round of weak Chinese data that rekindled fears about the global economy.
With traders moving back into investments considered safer, the losses also saw emerging market currencies turning lower.
The losses come as the International Monetary Fund urged governments to take action to prevent another global recession, warning there was an increasingly "dangerous" view that policymakers were out of ideas or had lost the will.
After a string of gains in recent weeks, confidence took a hit on Tuesday when China released data showing exports from the world's number two economy had plunged by the most since the financial crisis.
The news refocused attention on the slowdown in China - one of the key reasons global markets suffered a bloodbath at the start of the year - sending markets tumbling from Asia to the Americas.
"China trade data has become the seismic centre for concerns over the global economy," Chihiro Ohta, general manager of investment information at SMBC Nikko Securities in Tokyo, told Bloomberg News.
"The recent trend is that when the market's up everything goes up, and when it's down everything is down. It's not a nimble market where certain areas rise and certain areas fall." China's leaders are meeting this week for the annual rubber-stamp National People's Congress, where Premier Li Keqiang set a growth target of 6.5-7.0 per cent for this year.
On Wednesday Shanghai's stock market ended 1.3 per cent lower, breaking a six-day winning streak, while Hong Kong lost 0.1 per cent and Tokyo fell 0.8 per cent. However, Sydney rallied almost one per cent and Seoul recovered from early losses to end 0.4 per cent higher.
Energy firms fell into the red after oil prices turned lower Tuesday owing to long-running worries about a global oversupply.
Sydney-listed BHP Billiton was 1.9 per cent down, while rival Rio Tinto lost 2.1 per cent.
In Tokyo Inpex was down 2.6 per cent and Hong Kong listing CNOOC slipped 2.5 per cent while PetroChina shed 2.1 per cent.
But on Wednesday US benchmark West Texas Intermediate recovered from early selling to sit 0.5 per cent up in the afternoon while Brent added 0.7 per cent.
On currency markets, the flight to higher-yielding safe assets saw the dollar gain against emerging units, with South Korea's won down 0.8 per cent and the Indonesian rupiah 0.2 per cent lower. The oil-linked Malaysian ringgit shed 0.2 per cent while the Singapore and Taiwan dollars also retreated.
At a conference of the National Association for Business Economics, IMF Deputy Managing Director David Lipton said world leaders must expand efforts, including fiscal and monetary stimulus and structural reforms, to support growth.
He said the recent volatility in world markets and the plunge in commodity prices had intensified the need to address concerns over the health of the global economy.
In early European trade London rose 0.1 per cent, Frankfurt put on 0.3 per cent and Paris added 0.2 per cent.