Italy's political turmoil has sent a wave of concern through the 19-nation eurozone that the country could be heading toward a new financial crisis - and even, in the worst case, out of the euro currency. Yields on Italian government bonds soared as their prices declined.
Technology companies also fell. Most Southeast Asian markets were closed for holidays.
Stocks in the US and Europe sank Tuesday following political turmoil in Italy, which stoked fears of instability in the euro bloc.
Italian President Sergio Mattarella picked Carlo Cottarelli for prime minister after the anti-establishment 5-Star Movement and right-wing League refused to withdraw an anti-euro candidate as economy minister. South Korea's KOSPI and Australia's S&P/ASX 200 slipped 2.0 percent and 0.5 percent, respectively.
Britain's FTSE 100 sank 1.2 percent and the French CAC 40 slumped 1.2 percent.
Italian stocks rallied as much as 2.9 percent, the standout performers in Europe as Italian banks gained 3.8 percent.
Adding to selling pressure on the unit is a brewing crisis in Spain, where Prime Minister Mariano Rajoy faces a no-confidence vote after his party was found guilty of benefiting from illegal funds in a massive graft trial.
Juventus confident of signing Emre Can from Liverpool this week
He made 232 appearances for the club, scoring 32 goals and winning the Ligue 1 title in 2016-17. Together with the signing of Naby Keita , who agreed on a move to Liverpool last season.
Given the usual lag of a few months between currency moves and earnings revisions, European stocks could see profit upgrades in the coming months if the Italian political crisis doesn't completely derail the euro-area's economic recovery. The yield on the 10-year Treasury fell to 2.78 percent, its lowest since early April, from 2.93 percent.
EARLY LAGGARDS: Among health care companies, Johnson & Johnson fell 1.2 percent to $120 and Thermo Fisher Scientific lost 1.4 percent to $201.75.
ENERGY: Benchmark U.S. crude fell 1.1 percent to $67.13 a barrel in NY.
Oil struggled under pressure from expectations that Saudi Arabia and Russian Federation would pump more oil to counter potential supply shortfalls from Venezuela and Iran, even as USA output has surged in recent years. Brent crude, used to price global oils, rose 0.1 percent to $75.39 a barrel in London.
KINDER MORGAN: Kinder Morgan climbed 2.4 percent to $16.27 after the Canadian government said it will buy an oil pipeline to the Pacific coast to ensure it gets built.
"While a 25 basis points hike is largely a done deal, the next focus is on whether the (policy board) will start to indicate the peak of policy rates as policy approaches neutral", Tai Hui, JP Morgan Asset Management chief strategist for Asia-Pacific, said. The company halted essential spending on the project and said it would cancel it altogether if the national and provincial governments could not guarantee it.
The sharp downturn in Asia followed from an equally harsh session on Wall Street on Tuesday, where the Dow Jones Industrial Average fell 1.6 percent, the S&P 500 lost 1.2 percent and the Nasdaq Composite dropped 0.5 percent. Hong Kong's Hang Seng index plunged 1 percent.