Asian stocks started down on Thursday after inconclusive US midterm election results and a turbulent cryptocurrency market left Wall Street and European markets in a sea of red.
The uncertainty, especially about how the midterm results would impact inflation, transferred to Asia overnight.
Tokyo, Hong Kong, Shanghai, Seoul, Jakarta and Taipei were all trading lower.
"A purple dilemma might be the best way to describe the red-blue tangle that emerged Wednesday. It'll be gridlock, that's for sure," Stephen Innes of SPI Asset Management said of the US midterms.
"Perhaps not the friendliest kind for market participants, many of whom were hoping for a more resounding rebuke of Democrats given inflation realities."
All eyes are expected to turn to US inflation data, due later Thursday, to gauge the speed of future rate hikes by the Federal Reserve.
"US growth looks still too strong to bring inflation down," Tapas Strickland of the National Australia Bank said in a note.
"The ongoing resilience in the (consumer prices) data and stickiness in inflation continue to point to the Fed hiking rates closer to 5.0 per cent or higher."
Fed officials have raised their policy rate to a range of between 3.75 to 4.0 per cent.
'Crypto tumult'
Markets in Asia were already grappling with the impact of strict zero-Covid measures in China, with supply chains and activity slowed by harsh lockdowns and testing policies.
"China's domestic demand is weak and their key trading partners are entering recession territory," said Edward Moya from Oanda.
"China is also continuing to struggle with COVID as Guangzhou has to return to mass testing."
The crypto world was also rocked by a surprise decision from Binance, the world's biggest cryptocurrency platform, to scrap a possible acquisition of rival FTX.com a day after disclosing it had signed a non-binding letter of intent to buy it.
The near-collapse of FTX has plunged bitcoin to a two-year low.
"You can't deny the growing correlation between bitcoin and risk assets," said Innes.
"The FTX news is having an outsized effect on asset prices," he said, adding that "all ships were sinking on the crypto tumult."
Key figures around 0230 GMT
Tokyo - Nikkei 225: DOWN 1.16 per cent at 27,395.71
Hong Kong - Hang Seng Index: DOWN 2.49 per cent at 15,950.47
Shanghai - Composite: DOWN 0.39 per cent at 3,036.37
Pound/dollar: UP at $1.1394 from $1.1352
Euro/dollar: FLAT at $1.0017
Dollar/yen: DOWN at 146.19 yen from 146.37 yen
Euro/pound: DOWN at 87.89 pence from 88.19 pence
West Texas Intermediate: DOWN 0.22 per cent at $85.64 per barrel
Brent North Sea crude: DOWN 0.19 per cent at $92.47 per barrel
New York - Dow: DOWN 2.0 per cent at 32,513.94 (close)
London - FTSE 100: DOWN 0.1 per cent at 7,296.25 (close)
