A massive sell-off in Asian stock markets on Thursday erased the previous day's strong gains after Wall Street fell on minutes from the Federal Reserve's latest meeting as worries mount the United States could stop or cut its monetary stimulus program.
"The pessimism about quantitative easing ending sooner than expected is likely to drift across Asia today. Although in reality, asset-buying is likely to continue throughout 2013, traders didn't take kindly to concerns over its huge costs," remarked Jason Hughes, head of premium client management at IG Markets in a note.
Even as Asian shares posted hefty losses, most of the major markets remain near lofty levels. Japan's Nikkei and Australia's benchmark are trading at their highest in more than one-and-a-half years, while South Korea's KOSPI remains above the 2,000-mark, within reach of a seven-week high.
The Shanghai Composite however, is headed for a 1.5 percent weekly loss as it retreats from a 9-month high hit earlier this week.
Analysts tell CNBC that any weakness in equity markets should be seen as a buying opportunity. "You can have these temporary pullbacks on the way, volatility is not going to go away but to us, the best way to gain exposure into a continued recovery is to own equities," said Manpreet Gill, senior investment strategist at Standard Chartered.
The 2.3% drop in Australian shares took the edge off its recent rally, which has gained momentum with a better-than-expected reporting season. Amid earnings misses, Origin Energy shares tanked over 8 percent after announcing profits for the fiscal year would fall 10 to 15 percent from a year earlier.
Chinese property counters weighed on the Shanghai market following Premier Wen Jiabao's call on Thursday to end real estate speculation. Vanke and Gemdale lead the losses, falling over 3 percent.
Mid-tier banks were amid the biggest losers with Minsheng Bank and Hong Yuan slipping 6 percent. Inflation continues to be a growing concern after the Chinese central bank attempted to remove excess liquidity from the market earlier this week, giving way to fears that monetary policy may be tightening.
In Hong Kong, Chinese footwear retailer Belle International plummeted over 16 percent after warning its 2012 net profit would only be marginally higher than the year before.
Japan's Nikkei slumped 1.4 percent as investors took a wait-and-see approach ahead of the government's nomination of the next central bank governor. A decision is due sometime next week.
The benchmark index is up 10 percent since the start of this year, spurred by Prime Minister Shinzo Abe's aggressive monetary policy that has driven the yen lower. Investors are hoping his choice of governor will be supportive of more radical easing measures needed to reflate the world's third biggest economy.
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Currencies remain a major theme for South Korean shares, which suffered a marginal loss of 0.5 percent after Wednesday's rally on a weakening Korean won. The benchmark index is set to post a 2.5 percent gain for the week.
The currency was softer against the U.S. dollar after incoming President Park Geun-hye expressed action on Wednesday to ensure the won's stability. Domestic firms have been hard hit by the won's ascent, which makes their products more expensive in overseas markets and reduces overseas earnings.