"I think what's dragging down the regional markets is the very poor start to trading in Europe. Only China and Australia have weathered the storm," said Jeffrey Halley, analyst at brokerage OANDA.
The pan-European STOXX 600 index was down 2.4% at 0705 GMT, after ending Tuesday with its worst quarter in 18 years.
Reports of fresh infections and deaths from the virus continued across Southeast Asia, with Malaysia recording as many as 142 cases and two deaths on Wednesday.
Malaysian equities lead the losses and posted their biggest intraday drop in over a week. Heavyweight Tenaga Nasional fell 1.7%.
Indonesian stocks reversed course after a strong start to the session and ended 1.6% lower, with financials being the top losers. PT Bank Central Asia Tbk shed 0.8%.
"This is actually a fair reflection of where the world is at, at the moment. Rallies are limited in scope and tentative, with markets falling further and faster," Halley said.
Weighing on sentiment was data which showed Indonesia's tourist arrivals fell nearly 30% in February, partly because of the global spread of COVID-19.
Singaporean shares shed 1.9%, with big cap financials United Overseas Bank Ltd and DBS Group Holdings Ltd falling 1.9% and 2.3%, respectively.
The Thai benchmark also ended lower, weighed by financials and communication services.
On the upside, China's factory activity improved in March after plunging a month earlier, a private survey showed on Wednesday.
Vietnamese equities advanced 2.7%, with gains underpinned by the financial sector.
The country plans to cut its electricity prices by 10% for three months to support people hit by the epidemic, state media reported on Wednesday.
The Philippine index rose n 1.6%, with real estate conglomerate Ayala Land adding 3.2%.
(Reporting by Arundhati Dutta; Editing by Ramakrishnan M.)
By Arundhati Dutta
