 "Asian stocks slump; oil hits six-month peak on Syria")
An acute 'risk-off' mode also boosted the appeal of the Japanese yen, which held near a one-week high against the dollar and euro after having posted its biggest rally in more than two months.
The dour mood saw emerging market currencies extend their sharp selloff, with both the Indian rupee and Turkish lira hitting record lows, just as investors were pulling out ahead of an expected cut back in stimulus by the US Federal Reserve, possibly as soon as next month.
European stocks were expected to open lower on Wednesday, with Britain's FTSE 100 seen down as much as 0.6% and Germany's DAX indicated down 0.5%, according to financial spreadbetters.
The big moves in markets came as Washington and its allies were gearing up for a probable military action against President Bashar al-Assad's forces, which were blamed for last week's chemical weapons attacks.
Western officials told the Syrian opposition to expect a strike within days, and US Defence Secretary Chuck Hagel said American forces in the region were "ready to go" if President Barack Obama gives the order.
The news on Syria overshadowed improving economic indicators, such as rising US home prices and Germany's Ifo business survey hitting its highest in 16 months.
Overnight, US and European stocks suffered their worst day since June, and investor nervousness was reflected in a nearly 12% jump on the CBOE volatility index, Wall Street's so-called fear gauge, to a two-month high.
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"(The Syrian issue) is adding a layer of nervousness on top of the debate of US tapering which is having a very big impact on carry trade globally and having a very big impact on emerging markets," a senior trader at a foreign bank in Tokyo said.
Tokyo's Nikkei share average sagged as much as 2.6% to a two-month low, while the yen was largely steady at 97.120 to the dollar and 129.90 to the euro after climbing more than 1% overnight.
Emerging crisis
MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.7%, hitting its lowest level since July 9 and extending the previous session's 1.2% drop.
Emerging markets have been reeling for the past few weeks on expectations that the Fed will reduce its $85 billion a month bond-buying programme as soon as September.
As the selloff in deficit-stricken emerging market nations deepened, Indonesian exchanged traded funds saw heavy redemptions from US investors overnight.
Indonesian shares tumbled as much as 3.3% to a 14-month trough on Wednesday, while Philippine stocks sank 5.3%, hitting a more than eight-month low, and Thai equities dropped 2.5% to a near one-year low.
Indonesia's central bank board will meet on Thursday in a surprise move amid widespread speculation it will have to raise interest rates again to defend the fast-falling rupiah, now its lowest since April 2009.
Suresh Kumar Ramanathan, head of regional interest rate and FX strategy at CIMB Investment Bank, said those emerging Asian currencies were likely to fall further until their central banks loose monetary policy.
"Tightening of policies will exacerbate the risk of currency weakness, raise the cost of capital, further slowdown the economy and induce unnecessary volatility in the debt, currency and equity markets in Asia," Ramanathan said.
India pain
The Indian rupee hit a record low to below 68 per dollar after logging its biggest single-day fall in nearly 18 years on Tuesday after the lower house of Parliament approved a nearly $20 billion plan to provide cheap grain to the poor, raising concerns the fiscal deficit will blow out even further. India's NSE share index shed 2.7%, hitting a near 11-month trough.
Other emerging market currencies were also battered, with the Thai baht falling to a low of 32.28 per dollar, its weakest level in three years, and the Turkish lira slumping to a record low of 2.0605 to the dollar.
The heightened geopolitical risk in the Middle East drove the prices of gold and oil higher, however.
Brent crude prices advanced 2.4% to a six-month high of $117.14 a barrel, extending Tuesday's 3.3% surge - the biggest one-day percentage gain in nearly 10 months.
Gold climbed 0.8% to a more than three-month high after also gaining 0.8% on Tuesday.