Asian shares, U.S. futures and oil fell on Wednesday as a weak Chinese manufacturing survey renewed fears of a hard landing for the world's No. 2 economy, exacerbating worries about faltering global growth following a downward revision of U.S. GDP data.
The euro also fell, hit by a report in a Belgian newspaper that the Franco-Belgium bailout of Dexia bank (DEXI.BR) - the first casualty of the euro zone sovereign debt crisis - was on the verge of a collapse.
Market volumes were low, with the twin threats of a flagging U.S. economy and Europe's inexorably worsening sovereign debt crisis heightening risk aversion. If it gets much thinner, it's going to stop, said Martin Angel, a dealer at Patersons Securities in Perth.
Sentiment worsened after the release of the HSBC flash manufacturing purchasing managers' index (PMI), the earliest indicator of China's industrial activity, which slumped in November to 48, a low not seen since March 2009.
MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 1.9 percent, with the materials .MIAPJMT00PUS, energy .MIAPJMT00PUS and technology .MIAPJIT00PUS sectors leading losses.
In Australia, heavyweight miners BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) fell 2.6 percent and 1.7 percent respectively, while South Korean tech giant Samsung Electronics (005930.KS) shed more than 2 percent. Tokyo markets were closed for a holiday.
U.S. stocks had fallen around 0.5 percent on Tuesday, their fifth successive losing session, after data showed the economy grew at a 2 percent annual rate in the third quarter, below the initial estimate of 2.5 percent. .N
S&P 500 futures traded in Asia fell 1.2 percent, with losses accelerating after the HSBC flash PMI, suggesting more falls to come on the last day of Wall Street trading before the Thanksgiving holiday.
The euro fell 0.3 percent to around $1.3462, while the dollar rose a similar percentage against a basket of major currencies .DXY as investors sought safety.
Reaction to the Dexia report reversed earlier gains for the single currency, made after the International Monetary Fund said it was beefing up its lending instruments to help shield some smaller countries from the euro zone debt crisis.
The spreading crisis - which has pushed up risk premiums for Spanish, French, Italian and Belgian government bonds - is making it increasingly hard for European banks to access dollar funding in the money markets.
The stresses pushed dollar LIBOR rates, the benchmark for banks lending to each other, up for the 102nd straight session on Tuesday to double the level since July.
Euro/dollar cross currency swaps, which measure the cost of swapping euros into dollars, are at the most expensive levels since 2008. U.S. crude oil fell more than $1 a barrel to $96.85 on fears that a slowing growth will reduce demand.