Markets across Asia plunged on Wednesday, as growing fears of a possible U.S.- led military intervention in Syria rattled global markets, and risk-averse investors resorted to panic selling.

The MSCI All Country Asia index, excluding Japan, fell 1.73 percent on Wednesday while the Philippine stock index, PSCi, plunged 6 percent. Indonesia’s JSX Composite fell 3.71 percent and Japan’s Nikkei lost 2.04 percent after the yen rose 1.5 percent against the dollar overnight, while Australia’s S&P/ASX 200 dropped 1.14 percent.

“Global events are taking the forefront here. Hearing that the U.S. may be more aggressive with Syria set a negative tone to the market,” Brad Sorensen, director of market and sector analysis at Charles Schwab, told MarketWatch.

In China, the Shanghai Composite index was trading down 0.24 percent while Hong Kong’s Hang Seng Index plunged 1.74 percent. South Korea’s KOSPI Composite index was down 0.56 percent and Singapore's Straits Times index lost 1.27 percent. The FTSE Bursa Malaysia Top 100 index was down 1.67 percent.

India’s BSE Sensex was trading down 1.53 percent while the rupee continued to hit fresh record lows against the dollar. India's domestic currency opened, on Wednesday, at a new record low of 66.90 and fell almost 4 percent to 68.75 in intraday trading, breaching the record 66.30 level set in the previous session. 

The Sensex had fallen 3.18 percent, or almost 600 points, on Tuesday, after the domestic currency's free-fall. The rupee, which is now the worst performer among Asian currencies has fallen by about 7 percent so far this week, and has lost 25 percent of its value since the beginning of the year.

As tensions mounted over Syria, gold -- a safe-haven asset -- continued its rally, with U.S. gold futures for December delivery climbed $20.50 to $1,413.50 an ounce. Brent crude prices for October delivery climbed more than 2 percent to $117.02 a barrel, according to Bloomberg data.

However, analysts described the current panic in global markets as irrational and said markets would soon stabilize.

“This selloff is a clear knee-jerk reaction by global market participants who are clearly reducing risk over fears the situation in Syria could deteriorate substantially. It’s just a typical case of irrational fear driving investors’ decision making,” Tim Radford, an analyst at Rivkin Securities, told MarketWatch.

The fear of a possible U.S.-led military strike on Syria escalated on Tuesday with U.S. Secretary of State John Kerry stating that there was evidence that Bashar al-Assad’s government used chemical weapons against its civilians.

According to a report from Foreign Policy on Tuesday, U.S. intelligence officials intercepted calls from Syrian defense ministry officials, which prove that the Middle Eastern nation used nerve gas in an attack on Aug. 21 that left thousands dead. Also on Tuesday, the Wall Street Journal reported that intelligence from Israeli spy services showed that several types of chemical weapons were moved in advance to the same Damascus suburbs where the attack took place a week ago.

U.S. President Barack Obama is currently consulting with allies and members of Congress on a response to Syria.