In Japan, Asia's largest market, the Nikkei index continued its slide a day after suffering heavy losses, ending Tuesday down 5.65 per cent.
The fall was the Nikkei's biggest one day loss in a decade.
|Tokyo Nikkei 225
|Hong Kong Hang Seng
In Hong Kong, the benchmark Hang Seng index ended the day down 8.7 per cent as it lost 2,061.23 points - its biggest points drop ever.
In India's financial capital, Mumbai, trading was temporarily halted when the market nosedived almost 10 per cent on opening - a day after recording its sharpest one day fall ever.
Reopening an hour later, India's two major stock indexes resumed their decline despite an appeal from the country's finance minister for investors to remain calm.
In Australia shares also tumbled, with the market losing 7.1 per cent at the end of the day, its biggest drop in nearly 20 years as brokers saw a wave of panic selling.
The benchmark S&P/ASX200 index has now lost more than 18 per cent this year.
Stocks in China also took a hammering as investor jitters over the economy's susceptibility to the US sub-prime mortgage crisis began to take its toll.
In Shanghai the main Shanghai Composite index ended the day down by 7.22 per cent, its lowest level in several months.
Shanghai-listed shares in China's second biggest bank, the Bank of China, were suspended on Tuesday after stock exchange authorities said the bank had failed to comment on an "important event".
The exchange gave no further details, although its statement was interpreted as being related to media reports that the bank may post a 2007 loss because of write downs on billions of dollars of investments in the US sub-prime mortgage market.
Bank of China is the country's biggest owner of sub-prime mortgage securities.
"People have been burying their heads in the sand, and reality is just hitting"
Andrew Clarke, Societe Generale Securities Hong Kong
Zhang Gang, an analyst at Southwest Securities, told AFP: "Investor confidence was hit severely by the global slump.
"People are also worried that the US credit crisis may spread into other countries."
Worries that China's banks may be facing significant losses from their exposure to the US mortgage crisis also saw Shanghai-listed shares in other mainland banks fall steeply.
In Hong Kong, Bank of China shares continued to trade, falling 8.6 per cent on Tuesday morning, on top of a fall of 6.4 per cent a day earlier.
|Trading in Mumbai was briefly suspended|
as stocks nosedived on Tuesday's open [EPA]
Banking giant HSBC was also not immune seeing its shares tumble 8.1 per cent.
Meanwhile, the Hong Kong index of locally listed mainland Chinese companies, so-called H shares, suffered its sharpest drop in a decade, losing almost 12 per cent.
Among the biggest losers was Air China, which saw its stock nosedive by 19.2 per cent on Tuesday, on top of a 15 per cent plunge on Monday.
Andrew Clarke, a trader at Societe Generale Securities in Hong Kong, told Reuters: "What this tells us is sub-prime is nowhere near contained.
"People have been burying their heads in the sand, and reality is just hitting. What governments have got to do is to limit the damage - they better come up with something quickly or else we'll go into a full-blown bear market."