Asian markets were hit hard by news the U.S. Senate had failed to reach an agreement on a bailout planto rescue the ailing Big Three automakers. Losses in the Japanese market accelerated in the afternoon as a sharp selloff in key auto stocks put pressure on the market.
Gloomy comments from the head of U.S. bank JPMorgan Chase Jamie Dimon, who told CNBC in a live interview that trading in the last two months were "terrible", did not help the trading sentiment in Asia.
See the full story and videos of the interview here.
Japan's Nikkei 225 Average plunged as much as 6 percent but closed 5.6 percent lower led by steep losses in shares of carmakers. Toyoto Motor nosedived 10 percent while Honda Motor and Nissan Motor both dived around 12 percent.
Elpida Memory was a notable loser in Japan, tumbling more than 11 percent at the finish as the cash-strapped chipmaker said it will redeem all or part of a recently issued convertible bond worth $540 million dollars, forcing it to look for alternative sources of financing.
South Korea's KOSPI closed 4.4 percent lower following five consecutive gains. Hyundai Motor dropped 8 percent while Kia Motors plunged 10 percent.