Asian stocks slide after S&P 500 fell 2% on Monday
Meanwhile, investors expect signs of economic turbulence to prompt the US Fed to signal a slowdown in the pace of tightening in 2019
Tokyo — Asian share markets slumped on Tuesday as heightened concerns about a slowing global economy sent Wall Street stocks skidding to their lowest levels in more than a year.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.3% in mid-morning trade while Japan's Nikkei tumbled 1.2% by the midday break.
Chinese shares opened in negative territory with the blue-chip index down 0.3% and Hong Kong's Hang Seng index flat, while Australian shares fell 0.8%.
MSCI's broadest gauge of the world's stock markets, ACWI, was down 0.05% on Tuesday, after having hit its weakest level since May 2017 the previous day. It has declined 16% top hit on January 29.
US stock futures rose 0.4% in Asia following the previous session's sharp sell-off.
On Monday, the S&P 500 lost 2.08% to hit its lowest since October 2017 as it breached lows reached during a sell-off in February, having wiped out about $3.4-trillion of market value since late September.
The Nasdaq Composite dropped 2.27%, with Amazon, one of the best-performing shares in 2018, sliding 4.5%.
A profit warning from Asos, a previously high-flying UK online-clothing retailer, shocked investors, sending US consumer discretionary shares down 2.8%.
"US retailers have been stocking up on consumer goods from China before hikes in tariffs, piling up inventories. From now their costs are seen rising next year. That may have been kind of known to everyone but it's becoming reality," said Tatsushi Maeno, senior strategist at Okasan Asset Management.
In addition, the National Association of Home Builders Housing Market Index indicated US homebuilder sentiment had fallen to a three-and-a-half-year low. It was the second consecutive month of disappointing reading.
The gloomy data came after weak economic news from China and Europe late last week. The 10-year US treasuries yield dropped to 2.853%, edging near a December 10 low of 2.825%, its lowest level since late August.
The US Federal Reserve is widely expected to raise interest rates on Wednesday, which would be its fourth hike in 2018.
But many investors now expect signs of economic turbulence to prompt the Fed to signal a slowdown in the pace of tightening in 2019.
On Monday, US President Donald Trump and his top trade adviser ratcheted up their criticism of the central bank's monetary tightening.
"It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!" Trump wrote in a tweet.
White House trade adviser Peter Navarro amplified those remarks a few hours later, calling the Fed "crazy" for having signalled that it would continue to raise rates in 2019
The Fed said in September that its policy makers expected three more rate hikes in 2019 while money-market futures were pricing in less than one such move.
The spectre of a "dovish rate hike" kept the dollar in check.
The euro traded slightly higher at $1.1355, after having gained 0.4% on Monday. The greenback gave up 0.1% against the yen to ¥112.70, adding to Monday's fall of nearly 0.5%.
The offshore Chinese yuan was slightly stronger at 6.8900 to the dollar.
Investors are awaiting details of a speech by President Xi Jinping to mark the 40th anniversary of China's market reforms.
China is also expected to hold its annual central economic work conference later this week, where key growth targets and policy goals for 2019 will be discussed.
Oil prices extended losses on signs of oversupply in the US and as investor sentiment remained under pressure from concern over global economic growth and fuel demand.
US crude fell as low as $49.01 per barrel on Monday, its lowest since September last year and last stood at $49.37, down 1% on the day.
Brent crude oil futures lost 65c, or 1.1%, to $58.96 per barrel.