Asian stocks witnessed another selloff on Monday, tracking the meltdown in global equity markets, amid fears of a China-led economic slowdown.
Wall Street finished deep in the red on Friday as global growth concerns accelerated selling pressure to push the blue-chip Dow Jones Industrial Average and tech-heavy Nasdaq into correction territory.
The Dow and the S&P 500 ended 3.12 percent and 3.19 percent down respectively, while the Nasdaq Composite lost 3.5 percent. On Friday, the major averages had their biggest trade volume day of the year and posted their worst week in four years.
Meanwhile, China allowed pension funds managed by local governments to invest in the stock market for the first time over the weekend, potentially channeling hundreds of billions of yuan into the country's struggling equity market.
Nikkei skids 1.9%
Japan's Nikkei 225 index inched up from the morning's low but remained at a five-month low, hit by a stronger yen which climbed against the U.S. dollar amid cooling bets that the Federal Reserve will raise U.S. interest rates next month.
The Topix index lost nearly 3 percent in early trade, bringing the losses from its eight-year peak hit less than two weeks ago to more than 10 percent.
Export-oriented names were battered by the renewed strength in the local currency; blue-chip Toyota Motor plunged 4.3 percent, while Sony and Canon eased 3.2 and 2.1 percent, respectively.
Index heavyweights also plummeted from the get-go, contributing significant downside to the bourse. SoftBank and Fanuc losing 1.7 and 1.2 percent, respectively.
Meanwhile, the country's Economics Minister Akira Amari said weakness in China's economy must be "watched carefully" as it "may spread to ASEAN and other Asian economies," Reuters reported. Amari adds that he expects China's economy to settle down as government takes steps to manage growth.
ASX tanks 1.8%
Australia's S&P ASX 200 index sank to its lowest level since July 2014, amid a broad-based sell-off.
In the banking sector, Westpac receded more than 2 percent, while Australia and New Zealand Banking, Commonwealth Bank of Australia and National Australia Bank fell between 1.4 and 1.9 percent.
Santos and Woodside Petroleum eased 6.3 and 2.8 percent, respectively, after U.S. oil prices recorded their eighth consecutive week of falls. Market bellwether BHP Billiton tanked 2.7 percent, while Fortescue Metals slumped 8.1 percent after announcing that its annual net profit dropped to $316 million Australian dollars ($229.5 million) versus A$2.7 billion from a year earlier, as the price of iron ore tumbled.
Meanwhile, New Zealand shares slumped 2 percent in early trade.
Kospi sags 0.2%
South Korea's Kospi index got off lightly compared to regional peers, but the index hovered near a seven-month low amid heightened tensions along the Korean peninsula.
Top aides to the leaders of North and South Korea resumed talks on Sunday after negotiating through the night in a bid to ease tensions involving an exchange of artillery fire that brought the peninsula to the brink of armed conflict.
Early-trade decliners include heavyweights such as Kepco and KB Financial Group, which sagged 2.3 and 1.7 percent, respectively. The bourse's top weighted stock Samsung Electronics pared early gains to tick down 0.2 percent.
Among gainers, LG Electronics and Shinsegae advanced 3.4 and 2 percent, respectively.
Rest of Asia
Bourses which just came online tracked the downbeat sentiment in the region.
Taiwan's weighted index opened down 2.6 percent to 7,592, marking its lowest level in over 2 years, even as the Financial Supervisory Commission (FSC) announced early Monday that short selling of stocks below the closing prices of the previous business day will not be permitted.
On the domestic data front, the country's jobless eased slightly to 3.74 percent in July, compared with June's 3.76 percent.
Singapore's Straits Times index remained well below the key psychological level of 3,000 points, dropping 2 percent at the open to hit its lowest level in more than 1 year.
Meanwhile, Malaysia's FTSE Bursa Malaysia KLCI index retreated 1.8 percent to a three-and-a-half-year low, while the ringgit hit a fresh 17-year low against the greenback.