The tumble extended a couple weeks of international trading turmoil rooted in concerns about overheated global markets and slower growth in the American economy, a major export market for Asian companies.

Concern about U.S. sub-prime lenders and lackluster retail sales pushed the Dow Jones industrials down 1.97 percent overnight, sparking selloffs across Asia.

Stocks in Japan, South Korea, Hong Kong, China and Malaysia were all down at least 2 percent, while Indian and Philippines stocks tumbled more than 3 percent.

At the Tokyo Stock Exchange, the region's biggest bourse, the benchmark Nikkei 225 index sank 506 points, or 2.95 percent, to 16,673 points. Foreign investors who bought up stocks during the recent rally led the selling, traders said.

Hong Kong's Hang Seng index fell 2.6 percent, Indian stocks opened 3.2 percent lower, while Philippine stocks plunged 3.4 percent.

Overnight, the Dow fell 242.66, or 1.97 percent, to 12,075.96 amid concerns about U.S. sub-prime lenders, who provide mortgages to people with poor credit. The U.S. Commerce Department also said sales at retailers rose a less-than-expected 0.1 percent in February, suggesting consumer spending might be waning.

While Asian markets are sensitive to signals of a slowdown in the U.S. economy, analysts said the economic fundamentals of the Asian region remain strong. The recent declines in stock prices were more likely a correction to cool markets that had risen too far too fast in recent months.

"The sell-off is in sympathy with the sharp sell-off we saw overnight on Wall Street, and it highlights the continued nervousness out there," said David Cohen, chief of Asian economic forecasting at Action Economics in Singapore.

"In perspective you could still say that this is a correction after the strong rally that was experienced for the previous several months around the world," he said.

While the U.S. retail sales data and mortgage news that prompted the sell-off on Wall Street "are a little concerning," fundamentals such as strong U.S. jobs data released Friday were still supportive of global equities.

"The world economy seems to be remaining on an upward trajectory," Cohen said.

The slump reversed a modest recovery in global markets from even bigger losses that started late last month with an 9-percent plunge in Chinese stocks Feb. 27, which contributed to a 416-point drop in the Dow later that day.

The Shanghai Composite index, which has been recovering in recent days, was down 1.85 percent Wednesday.

In India, jittery investors sold their holdings in almost every bluechip stock, dragging the 30-share Sensex — the benchmark stock index of the Bombay Stock Exchange — down by 403 points, or 3.2 percent, to 12,580 in the first 30 minutes of trading.

Indian shares have seen wild swings each time the global markets have turned weak. The Sensex tumbled a stunning 43 percent in May-June last year — only to bounce back to hit a new highs.

The Sensex reached a record 14,643 on Feb. 7, before losing about 14 percent in the latest round of global declines.