Asian stocks ended mostly lower on Wednesday following a global rout but Shanghai markets bucked the trend on their first trading day after a week-long holiday.
Disappointing data from Germany, the euro zone's largest economy, hit sentiment overnight. The country reported a shocking 4 percent monthly drop in industrial production for August, the worst reading in over five years.
Furthermore, the International Monetary Fund downgraded its assessment of the global economy. It now expects growth of 3.8 percent next year, down from its July forecast of 4 percent. The fund also said there's a 1-in-3 chance of the euro zone falling back into recession.
Those growth concerns saw Wall Street's three major indices drop more than 1.5 percent each with the hitting an eight-week low. European shares tumbled more than 1 percent each with Germany's Dax index closing at its lowest in nearly two months.
"The market reaction to the downgrading of the 2015 outlook by the IMF may have been the catalyst for the intraday selloff overnight, but it is by no means the only reason for global unease. The use of the term 'frothy' to describe markets didn't help, as valuations are a subjective metric. Talk of overheating, overvalued and ex-growth perpetuates worry," said Evan Lucas, market strategist at IG.
Shanghai 0.8% higher
China's benchmark Shanghai Composite index rose to a new 18-month peak following a choppy morning session. The index has hit 18-month highs in the past six consecutive trading days. Investors brushed off data showing HSBC's China services Purchasing Manager's Index (PMI) weakening from a 17-month high in August.
Real-estate developers rallied after Beijing announced new stimulus measures to boost property demand last week; Vanke and Shanghai Shimao rallied 3 percent each.
Retailers were mixed after retail sales during the week-long holiday slowed to 12.1 percent from a 13.6 percent rise in the same period last year. Beijing Wangfujing Department Store skidded 0.8 percent while Beijing Hualian Department Store gained 0.3 percent.
Nikkei 1.2% lower
Japan's benchmark Nikkei index pared losses after falling to a more than one-month low earlier in the session, closing lower for a second day. Meanwhile, the yen moved off a three-week high hit overnight after August's current account surplus came in above expectations.
ASX drops 0.8%
Australia's benchmark index closed at an eight-month low after finishing at a one-week low on Tuesday.
Kospi 0.4% lower
South Korean shares finished at their lowest levels since May. Sentiment was unable to get a boost after officials announced measures to shield exporters from the impact of the weaker yen.
Nifty finishes flat
Indian shares extended losses after closing at a near two-month low on Tuesday but finished Wednesday's session flat.