Australian stocks plunged more than four per cent in early trade today following carnage on US and European markets overnight over fears of another world economic downturn.
At 12.10pm local time the benchmark S&P/ASX 200 was 174 points lower at 4,102 after the Dow Jones Industrial Average dropped 4.3 per cent Thursday, its worst one-day fall in more than two years.
Tokyo shares fell 4.09 per cent in early trade.
IG Markets Australian analyst Ben Potter said all sectors on were expected to take a battering.
"It's going to be very ugly end to an even uglier week," he said.
"As expected, the material and energy names are likely to be the hardest hit after they fell the most on Wall Street, down 6.9 per cent and 6.8 per cent respectively."
Potter added that the first hour of trade was likely to see large amounts of forced selling as participants meet margin calls.
"After that, hopefully things will stabilise a little and we can tread water into the close, although there's likely to be a lot of nervousness ahead of tonight's nonfarm payrolls data in the US."
Falls were heavy in major stocks with the big banks ANZ and Commonwealth down 5.5 per cent and 3.4 per cent respectively at open and financial firm AMP off 5.5 per cent.
Australian treasurer Wayne Swan tried to calm investor nerves before the ASX opened, insisting the country's economic fundamentals were strong.
"Of course Australia is not immune from events in the rest of the world but the good news is our fundamentals are strong," the treasurer said in a statement ahead of Australian markets opening.
"We've got low unemployment, strong public finances with very low debt and a huge pipeline of mining investment."
The New Zealand stock market fell more than 2 per cent on opening. The benchmark NZX 50 index stands at 3,297, a fall of 79 points or 2.3 per cent.
Among the major listed companies, Fletcher Building shares have fallen 1.75 per cent, Contact Energy is down 2.53 per cent.
Telecom shares fell 2.82 per cent, while Sky City shares are down 0.84 per cent. Shares in Auckland International Airport were down 1.5 per cent.
In Japan, Finance Minister Yoshihiko Noda sounded caution shortly before the opening bell of the local exchange saying he was "closely watching" the forex and stocks markets after the selloff in foreign markets.
He told reporters he was in contact with foreign monetary authorities over ways to deal with a soaring yen.
The comment came after Japan intervened in the foreign exchange market on Thursday to weaken the yen in an effort to safeguard the country's export sector and fragile recovery.
Meanwhile South Korean shares opened down 4 per cent today, at their lowest level since March.
The benchmark KOSPI index was at 1,937.17, down 81.30 points.
The New Zealan dollar has fallen rapidly today, after climbing last week to a 30-year high above 88 US cents during 11th hour wrangling among American politicians over raising the US debt ceiling.
It has now fallen below 84 cents and is now trading at 83.16cents.
NZ HERALD ONLINE/ AFP