New concerns over the United States economy, slumping oil prices and China's currency troubles combined to send shares plunging across the region yesterday.
Nervous investors found themselves with few options other than to sell up in the wake of bad news from all directions.
The MSCI Asia Pacific ex-Japan - which tracks eight regional markets - dropped 1.6 per cent as it slid for the fifth consecutive trading day, hitting its lowest in two years.
China again took the worst hit, with the Shanghai bourse tumbling 3.42 per cent and wiping out the gains from Wednesday. Hong Kong's Hang Seng was down 1.77 per cent, while Japan's Nikkei pared 0.94 per cent.
Singapore was not spared, with the benchmark Straits Times Index (STI) losing 1.03 per cent to 3,009.78 - its lowest since February last year. Malaysia's KLCI was down 0.32 per cent.
"The selldown in Asia was mainly due to the overnight underperformance in the United States and European markets, which triggered the risk-off sentiments in this region (yesterday)," IG market analyst Bernard Aw told The Straits Times, referring to the Dow Jones Industrial Average's 0.93 per cent drop on Wednesday.
Investors have become nervous about the pace of the US recovery, after the mixed signals sent out by the Federal Reserve in its July meeting minutes released this week.
It did not confirm a September rate hike as expected, noting that economic conditions necessary for the hike "were approaching that point", but "had not yet been achieved".
Falling oil prices added further pressure to global markets. The US crude oil benchmark West Texas Intermediate hit its lowest since March 2009 on Wednesday night.
This shook the energy and marine sector here with Sembcorp Marine down 4.42 per cent at $2.38, its lowest since December 2008. Keppel Corp dropped 1.83 per cent to $6.96, its lowest since September 2011.
Wary investors in the region are also keeping an eye on China, where currency volatility and economic weakness loom large.
The country's surprise move last week to devalue the yuan was a huge shock to the already fragile Chinese markets that were just looking to recover from a crash in June.
The Shanghai Composite has dropped around 7 per cent since the Aug 11 devaluation.
"Although the Chinese government has since moved to stabilise the yuan after the market shock, people are still unsure where the currency will go," Mr Aw said.
The devaluation of the yuan has far-flung impact on regional companies, while hinting at the Chinese government's anxiety over its cooling economy after exports in July slumped 8.3 per cent year on year.
At the same time, attempts by the People's Bank of China to stabilise financial markets have shown only limited results.
Its move to inject 120 billion yuan (S$26.4 billion) into the banking system this week, for instance, was unable to stop markets from slumping into the red again yesterday.