In Australia, stocks fell more than five per cent in early trade as brokerages scrambled to deal with spooked investors looking to cut their losses given the bleak outlook.
"I've got an army helmet on my desk and I'm wearing it today, dodging the bullets," said Todd Kerslake, private client adviser at retail broker Shaw Stockbroking in Melbourne.
"We're getting a lot of calls from clients, there are some that are nervous and some that go with the flow."
But some traders noted that the scale of the losses and the mood of investors was nowhere near as dire as the stockmarket crash of 1987, which put global markets into a tailspin.
"This pales into insignificance by comparison," said Stuart Smith, senior private client adviser with Bell Potter Securities, who started as a trader in the 1970s.
In Japan, the Nikkei fell more than four per cent to a new low for the year, following a rout in the US, Latin American and European stock markets earlier, as investors sought refuge in cash and safer investments, such as gold and government bonds.
Japanese stocks recovered some of their losses, but were still down about three per cent in mid-afternoon trade.
SEEING RED, SEEING OPPORTUNITY
The Dow Jones Industrial Average posted its largest point decline ever, while the benchmark S&P 500 had its worst day since the 1987 crisis with an 8.8 per cent drop. Latin American stocks tumbled 13 per cent, their biggest decline in more than a decade.
Even before the vote by US lawmakers on the $700 billion bailout plan, Asian and European markets had fallen on fears the crisis was spreading, while US regional lender Wachovia became the latest big bank to succumb to the crisis.
In Korea, stocks initially fell sharply, but some brokers found solace in Asia's strong economic fundamentals and the likelihood that a revised rescue package would be put forward quickly.
"The impact on the domestic market would be limited compared to the US market," said Rommel Lee, retail research manager at Goodmorning Shinhan Securities in Seoul. Shares later recovered from earlier losses to be down about 1.2 per cent in the afternoon.
Mom and pop investors in Hong Kong crammed into local brokerages and kept a close eye on electronic boards bleeding red. But the mood was not overly negative and the market clawed back part of the earlier losses.
"Definitely, I don't see any panic in the market. It's quite orderly," said Simon Soo, with Soo Pui Chen Securities, a small brokerage in Hong Kong. He said the local government's decision not to impose tough restrictions on short selling had helped quell investor nerves.
"Most retail clients are cash-based. Most of the panic-selling will come from I think fund managers who are highly leveraged," he added.
Some even saw opportunity amid the uncertainty. "It's a good chance to buy in, and then sell out immediately," said an elderly man surnamed Chan in a Hong Kong brokerage.