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Oil prices slid on Tuesday to their lowest in almost six years, depressing energy shares but cheering those investors who focused on stocks seen as likely to benefit from cheaper fuel costs.
The dollar hit its weakest in a month against the safe-haven yen. Copper, whose price is linked to global growth prospects, fell to its lowest since 2009 as risk appetite waned.
Brent crude fell as low as $45.23 a barrel, down more than 4% on the day and extending Monday's 5.3% fall in the benchmark oil price.
The rout - oil prices have fallen 60% since June - continued despite data showing Chinese imports of crude surged to a record 7.15 million barrels a day last month.
The fall hit shares in the oil-producing Gulf and in Japan after the energy sector helped pushed US stocks lower on Monday.
"Investors are bracing for some serious damage in the energy sector's fourth-quarter earnings, and with oil dropping further this month, the outlook for revenue and profit looks grim," Saxo Bank trader Andrea Tueni said.
"Even though in the long term it's good news for a lot of sectors and the economy overall, the speed at which oil is going down is spooking the market."
In a sign that oil's slide, which economists fear could lead to a deflationary spiral, is not all bad news, metals company Alcoa reported late on Monday a higher-than-expected fourth-quarter profit, partly due to lower energy costs.
European shares opened lower, with energy shares, such as Total falling, but trading was choppy. The pan-European FTSEurofirst 300 index was last up 0.1%.
MSCI's main index of Asia-Pacific shares, excluding Japan was up 0.3%, though Tokyo's Nikkei 225 index closed down 0.6%.
Tokyo's fall reflected concern about the slide in oil prices and weakness on Wall Street, though losses were trimmed by a pause in the yen's strength against the dollar.
The dollar fell to 117.74 yen, its weakest since Dec. 17, before recovering to 118.40, about flat on the day.
"Lower oil prices should be good for the US economy, but I think people worry about disinflation, even in the US, so the market may be worried that lower inflation will postpone the Federal Reserve's hiking plans," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
The greenback was also flat against the euro at $1.1828. The single currency hit a nine-year low of $1.1754 last week on expectations the European Central Bank will soon launch a large-scale programme of government bond purchases to help ward off the threat of deflation in the flagging euro zone economy.
The dollar's weakness reflected lower US Treasury yields in the wake of Wall Street's fall. Ten-year notes yielded 1.88%, down from 1.99% in New York.
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In a further sign of safe-haven demand for core government bonds, yields on five-and 10-year Japanese government bonds hit record lows, with the five-year hitting zero%.
German Bund yields also fell, dipping 1.6 basis points to 0.47%.
London copper prices slipped below $6,000 a tonne, a fresh-five-year low, as the fall in oil spurred selling by hedge funds in China, despite strong trade data from the top user of the metal.
Gold hit a 12-week high, rising as far as $1,243.60 an ounce on safe-haven demand.
