Asia's major stock markets have taken a beating as investors sold shares, worried about further U.S. interest rate hike. Such a move could stifle demand for the region's exports in its biggest market.
Japan's Nikkei index sank to its lowest level in six months Thursday, losing 463 points.
Investors sold shares of Japanese exporters on speculation that the U.S Federal Reserve would tighten interest rates further. This could slow U.S. consumption of imported goods, such as Asian-made electronics, textiles and automobiles.
Sony shares fell nearly three percent, while Toyota Motors declined 3.4 percent.
The Nikkei closed at 14,633, down three percent.
Japanese Economic and Fiscal Policy Minister Kaoru Yosano says the public should not be pessimistic about the market.
Yosano says the unstable market might continue for a while. But he says it will eventually come back to reflect Japan's economic fundamentals.
In India, Bombay's Sensex plunged more than 500 points in early trading before regaining a bit of ground in the afternoon. The index has fallen by more than 25 percent since its record high in May of 12,671 points.
Prithvi Haldea of the research house Prime Database in New Delhi says the decline has been so sharp because Indian markets rose too fast, too soon.
"There was more money chasing too few stocks which led to price increase in a very abnormal manner. The market is absorbing now the reality," Haldea said.
Investors in Hong Kong, where the currency is pegged to the U.S. dollar, followed the regional selling. The Hang Seng Index tumbled 2.3 percent to 15,000. Castor Pang, a stock analyst at Sun Hung Kai Securities says he expects more selling in Hong Kong if U.S. interest rates move up.
"The Hong Kong interest rate will follow the U.S interest rate. The U.S. economic slowdown will also push the pressure on the worldwide stock market and that means the Hong Kong market will also follow the trend," he said.
South Korea's KOSPI also fell after the Bank of Korea raised its benchmark interest rate Thursday to its highest in three years. The KOSPI closed 3.5 percent lower at 1,223, the lowest since November.