Asian stocks closed sharply lower on Wednesday, after Wall Street sold off as much as 2 percent overnight amid a plunge in oil prices.
Japan's dropped 559.43 points, or 3.15 percent, to 17,191.25, while the Topix fell 45.77 points, or 3.15 percent, to 1,406.27. Across the Korean Strait, the Kospi slumped 15.93 points, or 0.84 percent, to 1,890.67.
Australia's ASX 200 extended losses, finishing down 116.56 points, or 2.33 percent, at 4,876.75. The energy sector saw the biggest loss, shedding 3.95 percent, while financials and materials fell 2.66 and 2.74 percent, respectively.
Chinese markets followed rest of Asia lower, but the retraced losses to close down 9.72 points, or 0.35 percent, at 2,739.84. The smaller Shenzhen composite erased its earlier losses of as much as 1.11 percent to gain 8.11 points, or 0.46 percent, to 1,737.20. Hong Kong's declined 2.28 percent, after falling as much as 3.32 percent at market open. Taiwan's Taiex closed down 68.24 points, or 0.84 percent, to 8,063.
The losses on the mainland came despite China's Caixin purchasing managers' index (PMI) for the services sector showing activity expanded at its fastest pace in six months in January. The index rose to 52.4 in January from a 17-month low reading of 50.2 in December.
But after the global market rout since the beginning of the year, some are seeing glimmers of light at the end of the tunnel. John Woods, chief investment officer for Asia-Pacific for private banking and wealth management at Credit Suisse, told CNBC's Squawk Box that markets are heavily oversold currently and will likely exercise a powerful technical rally.
But he urged caution over growth at the moment. "We are still quite cautious on the Fed, oil and China. Until we get some level of stability, certainty and clarity in those areas, we are actually recommending clients to lighten up," he said.
"Until we get some clarity in those three drivers at a global level, we are neutral on equities and where we see, for example, in China, the likelihood of some further volatility, if we see a technical rally, if we see a bull rally coming from these very low levels, we suggest clients explore the possibility of lightening their exposure going into it," Woods added.
Santos drops 6.9% as oil declines further
Two consecutive sessions of declines in overnight oil prices have erased most of last week's four-day gain, and was partly responsible for the drop in equities.
During Asian trade, West Texas Intermediate (WTI) futures fell 0.33 percent to $29.78 a barrel, after dropping 5.5 percent in U.S. trading hours. Global benchmark Brent futures for April delivery slipped 0.55 percent to $32.54, following a 5.23 percent decline overnight.
Evan Lucas, market strategist at spreadbetter IG, said in a morning note that the "supply side will continue to cause price spikes on 'possible coordination' [between OPEC and Russia] rather than actual action. Remember - talk is cheap."
Oil got a boost last week on comments from Russia that OPEC's largest producer, Saudi Arabia, was considering a 5 percent production cut.
Energy plays were broadly negative across the board. In Australia, Santos lost 5.14 percent, Oil Search was down 1.10 percent and Woodside Petroleum shed 5 percent.
Japan's Inpex fell 1.56 percent and Japan Petroleum declined 3.11 percent, while South Korea's S-Oil was down 1.13 percent.
Hong Kong-listed shares of CNOOC were down 4.37 percent, while Petrochina fell 4.38 percent.
NAB, one of Australia's so-called Big Four banks, finished 5.55 percent lower after reports said the bank had set a final offer price for its Clydesdale and Yorkshire Banks initial public offering in the United Kingdom at 100 pence ($1.44) a share.
Most mining stocks ended down, with BHP Billiton losing as much as 4.36 percent. On the other hand, iron ore producer Fortescue gained 1.89 percent.
The Aussie dollar-U.S. dollar pair slipped 0.36 percent, trading at 0.7013.
Japanese exporters closed mostly down, with major names such as Toyota, Nissan and Honda losing between 4.83 and 5.90 percent. The dollar-yen pair traded 0.34 percent down at 119.54; a stronger yen is a negative for export stocks as it reduces overseas revenue when converted to local currency.
Shares of Nintendo gave up morning gains of up as much as 1 percent, to finish 1.69 percent lower. The storied video game-maker released its third fiscal quarter earnings after market close on Tuesday, revealing a 36 percent on-year fall in net profit to 29.1 billion yen ($241.3 million), down from 45.2 billion, after a lack of high-profile game titles hit sales.
Nomura shares tumble 10.2%
Nomura shares tumbled 10.27 percent after reports said the company's net profit for the October-December quarter fell 49 percent on-year to 35.4 billion yen.
In South Korea, blue chip stocks ended mostly lower, with Samsung Electronics losing 0.87 percent, Posco down 1.98 percent and Kepco shedding 0.56 percent.
South Korean government on Wednesday unveiled a set of stimulus measures to counter cooling inflation and falling export numbers to keep the economy on track for growth. Measures included boosting public spending by 6 trillion won ($4.94 billion) and lending by policy banks by 15.5 trillion won, according to Reuters.
South Korea's January inflation was up by only 0.8 percent on-year, slightly lower than market expectations. In December, by comparison, the consumer price index rose 1.3 percent.
Over on Wall Street
On Wall Street, the closed down 295.64 points, or 1.80 percent, at 16,153.54, while the S&P 500 was down 36.35 points, or 1.87 percent, at 1,903.03. The slipped 103.42 points, or 2.24 percent, to 4,516.95.
It's also the middle of Asia's earnings season, with a number of notable companies releasing their figures later in the day, including Panasonic, Denso, Hitachi, Lenovo and South Korea's Shinhan Financial Group.
— CNBC's Huileng Tan contributed to this report.