Investors found little solace in Chinese President Xi Jinping's speech at the 40th anniversary of China's move toward market liberalisation, as he called for implementation of reforms but offered no new specific measures.
MSCI's broadest index of Asian shares ex-Japan <.MIAPJ0000PUS> dipped 0.9 percent in mid-afternoon trade, as worries dented risk sentiment and sent investors scurrying away from risky assets.
Singapore stocks <.STI>, the region's worst performer, reversed course from previous session to end 2.2 percent weaker, with financials underpinning losses.
"I don't think this slump will last as it was reportedly due to a fund liquidation activity," Liu Jinshu, director of research at NRA Capital, said, terming the sharp drop as a "knee-jerk reaction" to the slump in Wall Street.
The Federal Reserve is widely expected to raise interest rates on Wednesday, which would be its fourth hike this year. Markets will scrutinise the Fed's two-day policy meeting, which starts on Tuesday, for its sense of how the economy is holding up amid a U.S.-China trade conflict and global financial market volatility.
"We may see a relief recovery as people await the latest Fed decision," Jinshu added.
Malaysian stocks <.KLSE> pared early losses to their lowest close since Dec 28, 2016, with Sime Darby Plantation Berhad being the biggest percentage loser on the index.
Vietnam's index <.VNI> closed at its fourth straight session of declines, dragged down by real estate and consumer stocks.
Vietnam Dairy Products Joint Stock Co lost 1.6 percent, while insurance provider Baoviet Holdings closed 4.7 percent weaker.
Philippine shares <.PSI> closed 1.3 percent lower, dented by industrial and financial stocks, with conglomerate SM Investments Corp ending 2.1 percent weaker.
Thailand shares extended losses into a fourth session, closing at their lowest since Aug 25, 2017.
Energy stocks, the biggest drag on the index, notched losses after oil prices dropped for a third session on reports of growing inventory and forecast of record U.S. shale output. [O/R]
In Indonesia, the benchmark index <.JKSE> posted its third straight session in the negative terrain, with financial stocks being the main laggards.
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SOUTHEAST ASIAN STOCK MARKETS
Change on the day
Market Current Previous close Pct Move
Singapore 3045.54 3114.25 -2.21
Bangkok 1583.19 1601.48 -1.14
Manila 7420.4 7520.4 -1.33
Jakarta 6081.867 6089.305 -0.12
Kuala Lumpur 1635.31 1641.62 -0.38
Ho Chi Minh 927.25 933.65 -0.69
Change on year
Market Current End prev yr Pct Move
Singapore 3045.54 3402.92 -10.50
Bangkok 1583.19 1753.71 -9.72
Manila 7420.4 8,558.42 -13.30
Jakarta 6081.867 6,355.65 -4.31
Kuala Lumpur 1635.31 1796.81 -8.99
Ho Chi Minh 927.25 984.24 -5.79
(Reporting by Rashmi Ashok in Bengaluru, Editing by Sherry Jacob-Phillips)
By Rashmi Ashok