In China, Shanghai's main stock measure lost 0.6 per cent as news emerged that the country's exports plunged 17.5 per cent in January - the biggest monthly decline in more than a decade.

Japanese markets were closed for a public holiday but other Asian markets were mostly down, although their retreat was far less severe than Wall Street's, where the Dow Jones industrial average plunged 4.62 per cent on Tuesday as investors took fright at the depth of the abyss facing the US economy.

Investors appeared to ignore the US senate's Tuesday approval of an $838bn economic stimulus package and complained that the separate bank bailout plan unveiled by Timothy Geithner, the US treasury secretary, was short on detail.

They were not convinced that it would be enough to absorb the bad assets saddling bank balance sheets and unlock desperately needed funds for consumers and businesses.

'Muddled plan'

Garry Evans, a chief Asian equity strategist with HSBC in Hong Kong, called the plan "muddled".

He said the government was skirting around what many investors have already concluded: that the US may have to nationalise the banks for a period.

"People are not convinced that this plan is what it is needed," Evans told the Associated Press.

"They [US officials] have still philosophically backed away from the ultimate conclusion, which is the government will have to take over financial institutions," he added.

"Philosophically that's quite hard for the US government to admit, but the history of banking crises shows that is what governments usually do."