Asian markets saw in March with sharp losses on Thursday, extending a global sell-off on US interest rate hike fears, with energy firms taking another hit from plunging oil prices.
After a couple of weeks of calm, the volatility that kicked off February has returned on worries that the strong US economy and Donald Trump's tax cuts will lead the Federal Reserve to tighten borrowing costs more than previously thought.
The latest bout of selling came after new Fed boss Jerome Powell gave an upbeat assessment for the economic outlook as he appeared before lawmakers Tuesday. Similarly, markets went into spasms at the start of last month in reaction to a strong report on US jobs and wages growth.
Powell is due to speak on Capitol Hill again Thursday.
Adding to the unease are the relatively high valuations of stocks after a stellar 2017 and January, which saw some indexes hit record or multi-year highs.
"February finally cracked the volatility genie out of the bottle, and now the big question is: will he stay out for good?" Ryan Detrick, senior market strategist at LPL Financial, asked in a note.
"The good news is that March kicks off two of the strongest months historically for equities, before we hit a period of seasonal weakness from May through October."
On Wall Street, the Dow, S&P 500 and Nasdaq all ended sharply lower for a second successive day, and Asia again followed suit.
Tokyo finished the morning session 1.6 percent lower, with a stronger yen hitting exporters, while Hong Kong fell 0.4 percent, Sydney shed 0.8 percent and Singapore slipped 0.6 percent.
Wellington, Taipei, Manila and Kuala Lumpur were also well down. Shanghai was flat.
- Oil prices sink -
Among the biggest losers were petroleum-linked firms, tracking their counterparts in New York, which were hit by data showing a bigger-than- expected rise in US stockpiles. Hong Kong-listed CNOOC, PetroChina and Sinopec were all down around two percent, while Inpex in Tokyo sank three percent.
Both main contracts have been taking a hit recently as a ramp-up in US shale production offsets the effects of a key OPEC-Russia cap, while gains in the dollar against higher-yielding currencies make the commodity more expensive. Brent lost more than one percent and WTI more than two percent Wednesday.
Stephen Innes, head of Asia-Pacific trading at OANDA, said: "Traders are hypersensitive to crucial inventories data, especially top-side builds, given the market's refocusing on shale production output as the US remains on course to be the world's largest oil producer."
On currency markets the pound continues to struggle against the dollar after falling Wednesday on worries about faltering Brexit talks.
British Prime Minister Theresa May rejected a draft EU proposal over the tricky Northern Ireland issue, while the bloc's chief negotiator said the pace of trade talks needs to pick up to reach a deal this year.
"Brexit is going to get really ugly or it's not going to happen," said Greg McKenna, chief market strategist at AxiTrader.
"First, the UK government is making a mess of the negotiations... (and) second is that the EU clearly does not want the UK to leave, is making it as difficult as possible for it to do so and has just delivered a poison pill to ... May it knows she cannot swallow.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 1.6 percent at 21,714.97 (break)
Hong Kong - Hang Seng: DOWN 0.4 percent at 30,716.08
Shanghai - Composite: FLAT at 3,260.65
Euro/dollar: DOWN at $1.2189 from $1.2201 at 2200 GMT
Pound/dollar: DOWN at $1.3749 from $1.3769
Dollar/yen: DOWN at 106.63 yen from 106.71 yen
Oil - West Texas Intermediate: DOWN four cents at $61.60 per barrel
Oil - Brent North Sea: DOWN 11 cents at $64.62 (new contract)
New York - DOW: DOWN 1.5 percent at 25,029.20 (close)
London - FTSE 100: DOWN 0.7 percent at 7,231.91 (close)