Global markets have continued to fall as uncertainty over the impact of heavy losses in the US sub-prime lending market persists.
London's FTSE 100 fell below the 6,000 level on Thursday as uncertainty over the impact of losses in the US sub-prime lending market persisted.
The South Korean share index dropped more than 6.5% and trading was briefly suspended, while Japan's Nikkei index was closed down 2%.
The index of leading UK shares lost 2.2% to 5978.2 points in early trading on the back of heavy falls in Asia and further declines on Wall Street.
In Hong Kong, the Hang Seng index was down by 4%.
Concern about the state of world credit markets saw the US Dow Jones index close below 13,000 on Wednesday.
Concern about the state of world credit markets saw the US Dow Jones index close below 13,000 points on Wednesday.
Japan's Nikkei index lost 2% with shares down 3.7% in Hong Kong.
The Dow ended 1.3% lower at 12,861.5 points, the first time it had dipped below 13,000 since 24 April.
The Nasdaq shed 1.6% to 2,458.8 and the S&P 500 index dropped 19.8 points, or 1.4%, to 1,406.70 meaning it has now wiped out all of its 2007 gains.
Unknown scale
The recent financial market volatility has been triggered by the US sub-prime mortgage sector, which offers higher-risk loans to people with a poor credit history.
As US interest rates have risen and the housing bubble has burst, a growing number of sub-prime borrowers have defaulted on their loans prompting extensive financial difficulties for a number of investment funds with heavy exposure to the sector - and triggering fears of a wider financial crisis.
While some estimates say $300bn in loans could be at risk, one of the biggest worries for investors is not knowing the eventual scale of the problem.
Central banks have been trying to restore confidence and avoid a credit squeeze, with the Bank of Japan announcing on Thursday that it would inject a further 400bn yen ($3.4bn) into its banking system.
However, such moves, along with comments by US Treasury Secretary Henry Paulson that the economy was strong enough to withstand the turmoil, have done little to appease investors.
In Japan, the Nikkei index closed down 2% at 16,148.49 and elsewhere in Asia, Singapore lost almost 3.5% on Thursday morning, falling 113.18 points to 3,160.07.
In Sydney, Australia's benchmark S&P/ASX 200 lost more than 5% in the morning session, down 291.5 points at 5,496.5.
And when markets opened in Mumbai, India's Sensex index lost 4.34% of its value within minutes.
"The downtrend is still there," said DBS Vickers Securities retail market strategist Yeo Kee Yan.
Credit problems
The problems in the US housing market came to the fore again on Wednesday when Merrill Lynch told its clients to sell any shares they own in the country's largest mortgage lender, Countrywide Financial.
It warned that Countrywide could face bankruptcy if the availability of credit in the market gets any worse and there were market rumours that the lender had failed to raise some money it needed.
Worries about a slowdown in US consumption were not helped by results from the department store Macy's, which blamed the "difficult" climate for a 77% fall in its quarterly profits.
The US Federal Reserve made another $7bn (£3.5bn) of reserves available to the banking system on Wednesday. The Fed has injected $71bn into the system since 9 August.
