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 Nikkei 225 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 Shanghai composite 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 Hang Seng index 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.