The Nikkei tumbled 3.4%, extending yesterday's decline. The Hang Seng fell 2.4% while the All Ordinaries lost 1.6%. Mumbai's Sensex also opened weak, tracking global cues – down 0.9% in early trades.
Mainland Chinese markets remained closed for the Lunar New Year Holiday.
Growth concerns revisited the markets after dismal manufacturing report from the U.S. stirred up fears of slowdown in major economies.
The U.S. factory index for January by the Institute for Supply Management fell to 51.3 as compared with 56.5 in December. Although the reading was above the crucial mark of 50, it came in lower than expected; which hit investor confidence. Wall Street bourses logged sharp losses in response to the data.
Sentiment was already fragile in the region after an official report released in China over the weekend had shown slower industrial activity in the world's second-largest economy during January as compared with a month ago.
Lower risk appetite prompted investors to flee out of riskier assets like equities into safer havens like bullion, bonds and the yen. The yen was trading near a two-month high against the U.S. dollar, further pressurizing export-oriented stocks in Tokyo. Gold futures also staged a rally overnight as investors scuttled for safer bets.
In other news, the Australian central bank held its key interest rate steady at 2.5% in line with expectations.
Stocks on the Move
Resources stocks in Sydney turned weak along with all other sectors as growth worries preponderated.
Index heavyweight BHP Billiton (BLT) gave up 2.5% while Rio Tinto (RIO) was down 1.7%
But gold miners were shining bright following overnight gain in prices of the yellow metal. Newcrest Mining (NCM) jumped 4.2% while Northern Star Resources was up 2%.