South Korea's benchmark Kospi index broke a five-session winning streak to dive 7 percent. Markets in Singapore, Australia and mainland China also fell.
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The pullback was in line with weakness on Wall Street, where investor optimism surrounding the election of Democrat Barack Obama as president quickly evaporated in the face of gloomy economic news. The U.S. service sector, the largest component of America's gross domestic product, contracted sharply in October as new orders and employment fell.
Closer to home, a series of profit warnings from major companies such as carrier Cathay Pacific Airways Ltd. and Japan's Isuzu Motors Ltd. yanked the markets back to the reality of deteriorating economic conditions. After seeing some strong gains in recent days, many investors moved to take profits.
"We had one week of a rebound and then we're coming back to reality," said Francis Lun, general manager of Fulbright Securities in Hong Kong. "Despite the euphoria over the election, the world's economy hasn't changed."
In New York Wednesday, volatility swept over the U.S. market again, with the Dow Jones industrial average falling 486.01, or 5.1 percent, to 9,139.27. The S&P 500 index and the Nasdaq composite also shed more than 5 percent each.
U.S. futures were down, suggesting Wall Street would sink further in Thursday trading. Dow futures were down 78 points, or 0.9 percent, to 9,097.
In Tokyo, investors sold exporters' shares as the yen gained. Toyota Motor Corp. — which reports quarterly earnings later Thursday — fell 8.9 percent and Panasonic Corp. lost 8 percent.
The dollar fell to 97.77 yen, down from 98.21.
Crude prices sank further. Light, sweet crude for December delivery was trading 76 cents lower at $64.54 a barrel in Asian trade on the New York Mercantile Exchange. The contract settled at $65.30 overnight.
In Europe Wednesday, the FTSE 100 index of leading British shares lost 2.3 percent, Germany's DAX was off 2 percent, and the CAC-40 in France shed 2.3 percent.