The steep decline in U.S. stocks sent Asian stock markets falling sharply today amid concerns of an expanding global financial crisis.
Japan's benchmark Nikkei 225 stock index fell 4.8 percent to 11,632.99, falling under the 12,000-point level for the first time since mid-March.
South Korea's Kospi shed 6.2percent, and Taiwan's benchmark was off 4.6 percent. The slide in Australia and New Zealand wasn't as severe, with key indices down 2.4 percent and 2.7 percent, respectively.
The bloodletting in Asia followed a bleak Monday for world stock markets, which were hard hit after a double-fisted blow from Wall Street – news that Lehman Brothers had filed for bankruptcy and Merrill Lynch would be sold to Bank of America.
In Europe, the FTSE-100 share index closed down 3.9percent in London, the Paris CAC-40 fell 3.7 percent, and Germany's DAX 30 index of blue chips sagged 2.7 percent.
Asia's biggest stock exchanges in Japan, Hong Kong and South Korea were closed Monday for national holidays.
In Tokyo, Kyodo news agency reported the Japanese unit of Lehman Brothers Holdings has requested bankruptcy protection at a Tokyo court after the 158-year-old firm filed for Chapter 11 bankruptcy in New York on Monday.
Share prices in Tokyo fell across the board, with banking issues hit particularly hard in the wake of Lehman's collapse. Investors unloaded shares in major Japanese banks listed as some of the biggest lenders, including Aozora Bank, Mizuho Financial Group and Shinsei Bank.
Japan's central bank issued a statement Tuesday that it will carefully watch developments and take appropriate measures to stabilize the market.