But several of the region's bourses showed surprising resilience — notably in Hong Kong, South Korea and Taiwan — as lower prices lured some value investors and short sellers covered their trades ahead of the weekend.
"The expectation was to open much lower following the trouncing in the U.S.," said Benjamin Collett, head of hedge fund sales trading Daiwa Securities SMBC Co. in Hong Kong.
Hong Kong's benchmark Hang Seng index was up 1.4 percent to 13,975.83 by midafternoon, and Taiwan's index rose 1 percent.
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South Korea's main stock index rebounded from a 4.9 percent fall to close 3.9 percent higher after the country's central bank cut interest rates by a quarter of a point — the third cut in less than a month— in a bid to boost an economy hammered by the global financial crisis.
The move followed interest rate cuts by the European Central Bank and the Bank of England overnight.
In Tokyo, the Nikkei 225 stock average pared earlier losses to close down 316.14 points, or 3.6 percent, to 8,583. Investor sentiment took a hit after Japan's top automaker Toyota slashed its annual forecast to a third of what it was a year ago. Its shares plunged 9.2 percent.
Wall Street's stock indexes plunged more than 4 percent on widespread anxiety about the economy after computer gear maker Cisco Systems warned of easing demand and retailers reported weak sales for October. A jump in unemployment benefits aggravated concerns.
"We're seeing data every day that looks really bad," said Nicole Sze, Singapore-based investment analyst at Bank Julius Baer & Co., which manages about $300 billion in assets. "The question is, has all the bad news been factored in? That's what investors are asking themselves."
Markets were likely to see more volatility as along as bad news forced investors to readjust their expectations about the scope of a recession and its impact on company profits, analysts said.
Weakening prices for metals and oil pressured Australia's S&P/ASX 200 index, down 2.4 percent, as resource giants like BHP Billiton Ltd. slumped. Singapore's index was flat after the city-state's biggest bank, DBS Group Holdings Ltd., posted a worse-than-expected fall in quarterly profits.
Toyota Motor Corp. shares sank to 3,460 yen after the company on Thursday afternoon cut its net profit forecast for the fiscal year through March 2009 to 550 billion yen ($5.5 billion). That's half of its earlier projection of 1.25 trillion yen ($12.6 billion), and about a third of the previous year's profit of 1.72 trillion yen. If that projection holds, it would be the smallest annual profit in eight years.
Japan's leading automaker blamed a contracting U.S. auto market, strong yen and higher materials prices. Executive Vice President Mitsuo Kinoshita went so far as to call it "an unprecedented situation."
In Europe on Thursday, the Bank of England slashed its key interest rate by 1.5 percentage points to its lowest in more than 50 years in a dramatic bid to cushion its economy, while the European Central Bank, which sets rate for the 15-nation zone that uses the euro, settled for a more conservative half-point trim.
In New York on Thursday, the Dow Jones industrial average fell 443.48, or 4.85 percent. The losses combined with another decline Wednesday represent the Dow's worst two-day percentage decline since the October 1987 crash.
U.S. stock index futures were up, suggesting Wall Street would rebound Friday morning. Dow futures were up 101 points, or 1.2 percent, to 8,801, while S&P futures were up 12.1 points, or 1.3 percent, to 916.6.
Oil prices rebounded modestly after plummeting overnight, with a barrel of light, sweet crude for December delivery up 64 cents to $61.41 in Asian trade. The contract fell 7 percent, or $4.53, to settle at $60.77 overnight.
In currencies, the dollar was trading at 96.32 yen from 97.30 late Thursday in New York. The euro rose to $1.2722 from $1.2681 the day before.