Share prices in the Asia-Pacific region closed sharply lower following heavy selling in China and the United States. Government officials tried to calm the market, saying their economies remain strong. VOA's Heda Bayron reports from Hong Kong.
Japan's Nikkei 225 index closed nearly three percent lower Wednesday at 17,604. Shares in Hong Kong fell 2.5 percent, with the Hang Seng ending at 19,651. In Australia, stocks dropped 2.7 percent, while share prices in the Philippines tumbled eight percent.
Stock analysts say investors were spooked by the heavy sell off in China Tuesday that reverberated across the globe. China's main Shanghai stock index plunged almost nine percent Tuesday - its worst loss in 10 years. That and Wall Street's sharp decline hours later raised worries of weakness in the U.S. and Chinese economies.
Officials in the region tried to calm the markets. Japanese Chief Cabinet Secretary Yasuhisa Shiozaki said Japan's economic recovery is continuing. Australian Treasurer Peter Costello said the economy is on solid ground.
"I would expect that following events in China there will be volatility in the equity market for some time," he said. "But Australia being one of the strongest performing economies in the world is well braced to deal with shocks that may be coming from overseas."
In Kuala Lumpur, where share prices fell more than three percent, the head of the country's stock exchange Yusli Mohamed Yusoff said he remains optimistic about the market's performance in the medium term.
Some analysts say the regional sell-off may only indicate that investors are taking profit following massive gains in recent weeks. The analysts say the selling is not the start of a market meltdown like that seen in 1997, at the start of the Asian economic crisis.
"Most markets around the world have recently reached record highs, so you could argue that some sort of correctional consolidation was due anyway, and they now have the trigger," said Howard Gorges, vice chairman of South China Brokerage in Hong Kong.
The market that started the sell off, Shanghai, rebounded somewhat Wednesday. The Shanghai Composite index gained nearly four percent to close at 2,881.
