Investing.com - Asian shares fell sharply on Tuesday in line with a tailspin in late US equity trading that carried straight into the region and hit sentiment.
Japan's Nikkei 225 eased 6.66% at the break. Toyota was down 3.47%.
In Australia, the S&P/ASX 200 with the energy sub-index was among the worst-performing in the morning, falling 4.03%. The Reserve Bank of Australia released its February rate review and held steady at a record low 1.50% for the cash rate as expected. "Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual," the statement said.
"Notwithstanding the improving labour market, wage growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wage growth over time."
Earlier, Australia reported the trade balance at a surprise deficit of A$1.358 billion, compared with an A$250 million surplus seen for December and retail sales fell 0.5%, compared with a 0.2% increase seen on month in December and posted a 0.9% rise, compared with a 0.8% gain expected on quarter.
In Greater China, the Shanghai Composite dropped 2.15% and the Hang Seng index slumped 4.94%. Tech giant Tencent tumbled 5.4%.
Overnight, the selloff on Wall Street deepened as Financials led the decline following sharply after shares of Wells Fargo (NYSE:WFC) tumbled more than 8%, while a fall in crude oil prices weighed on energy.
The Dow Jones Industrial Average closed lower at 24345.68. The S&P 500 closed 4.10% lower, while the Nasdaq Composite closed at 6967.53, down 3.78%. The Dow Jones tumbled as much as 1,600 points to its lowest since Nov. 28.
Energy was one of the worst performers of the session falling more than 3% after oil prices extended their slide from last week, settling 2% lower at $64.15.
Shares of Wells Fargo (NYSE:WFC) closed more than 8% lower after the Fed, late Friday, said that it capped Wells Fargo’s assets prohibiting the bank from growing any larger than its total assets as of the end of 2017.
The move from the Fed was in response to the Wall Street bank's “widespread consumer abuses.”
Bullish ISM services data, meanwhile, provided markets with a brief period of respite before the selloff resumed in earnest.
ISM nonmanufacturing data for January showed an uptick to 59.9, beating expectations of 56.5.
Analysts said the strong ISM reading was indicative of a strong economic activity, which could strengthen further, should tax-reform measures lead to a solid rise in consumption.
“The reading today is consistent with an economy that is growing close to 3%,” Bank of Tokyo Mitsubishi said. “If consumers and companies spend the tax reform monies like they are supposed to, this could be the best year for the economy since the housing bubble years in the mid-2000s.”