Asian stocks tumbled Monday after the U.S. economy withered at its fastest pace in more than a quarter century, heightening doubts that the global economy can recover later this year. Japan's benchmark fell 4 percent.
As in the U.S. and Europe, investors across the region were shaken after figures Friday showed gross domestic product in the world's largest economy shrank at a 6.2 percent annual pace at the end of last year.
The decline, worse than most economists had expected, was the country's sharpest since 1982.
Adding to fears that the world economic crisis won't end anytime soon were more troubling signs that banks may need still more capital to cope with crippling losses.
On Friday, Citigroup Inc. agreed to turn over a huge stake to the U.S. government. And European banking giant HSBC PLC is expected to unveil plans to raise 12 billion pounds ($17 billion) in a new rights issue when it reports results later Monday.
Meanwhile, faltering insurer American International Group is expected to get another massive bailout.
"You're seeing the U.S. is sinking lower and lower, and we're still desperately searching for a bottom," said John Mar, co-head of sales trading at Daiwa Securities SMBC Co. in Hong Kong. "It's death by a thousand cuts, a slow death right now."
Every major market in Asia convulsed with selling.
In Japan, the Nikkei 225 stock average dropped 300.99, or 4 percent, to 7,267.43.
Hong Kong's Hang Seng lost 490.53 points, or 3.8 percent, to 12,321.04, and South Korea's Kospi plummeted 4.1 percent to 1,019.74. Markets in Australia, Taiwan and Singapore shed about 3 percent or more.
Equities markets in the U.S. and Europe suffered a similar rout on Friday.
In New York, the Dow fell 119.15, or 1.7 percent, to 7,062.93 — its lowest close since May 1, 1997.
The S&P 500 index fell 17.74, or 2.4 percent, to 735.09, and the Nasdaq composite index fell 13.63, or 1 percent, to 1,377.84.
With U.S. futures down, Wall Street was poised for more losses. Dow futures were down 89 points, or 1.3 percent, at 6,963 and S&P500 futures lost 10.7, or 1.5 percent, to 723.50.
Asian financal stocks were among the hardest hit. Leading Japanese bank Mitsubishi UFJ Financial Group dived over 5 percent. In Hong Kong, shares of HSBC were suspended ahead of Monday's results and expected announcements.
Oil prices weakened in early trade, with benchmark crude for April delivery down $1.14 at $43.62. Last week in the U.S., the contract fell 46 cents to settle at $44.76 a barrel on the New York Mercantile Exchange.
In currencies, the dollar was little changed at 97.52 yen, while the euro dropped to $1.2563 from $1.2668.