Those losses quickly spread to the Asia-Pacific region where Japan's Nikkei 225 average lost 1.2 per cent by midday on Wednesday.

In Hong Kong, the Hang Seng shed 1.5 per cent, while in South Korea the Kospi was off 1.3 per cent.

Markets in Australia and Singapore were also down.

'System is broken'

Analysts said investors have been shaken by growing evidence of decay, with policy makers offering little in the way of specifics as to how they plan to turn the global economy around.

The gloom was compounded by more grim news from struggling US car makers on Tuesday and mounting signs of slumping business activity.

"It is becoming increasingly clear that the system is broken," Kirby Daley, a senior strategist at Newedge Group in Hong Kong, told the Associated Press.

"And there does not seem to be a comprehensive long-term solution being formulated by any country, let alone a co-ordinated solution to the world's economic problems."