Investing.com - Asian markets fell sharply in morning trade on Thursday, with stocks in China and Japan plunging more than 4% after U.S. stocks suffered their worst one-day drops in eight months overnight. Fears of rising interest rates and a meltdown in technology shares were cited as catalysts for the selling.
Overnight, the Dow Jones Industrial Average dropped by 831.83 points to 25,598.74, the Nasdaq Composite fell 4 percent to 7,422.05. The S&P 500 dropped 3.3 percent to 2,785.68. Treasuries and the Japanese yen jump amid demand for safe-haven assets.
Luxury stocks underperformed as LVMH confirmed on Wednesday that China is stepping up checks for undeclared imports.
In Asia, China's Shanghai Composite and the SZSE Component slumped 4.4% and 5.2% respectively by 10:01PM ET (02:01 GMT). Hong Kong's Hang Seng Index was also down 3.7%.
U.S. President Donald Trump's comments also weighed on markets sentiments as he continued his attacks on the Federal Reserve, blaming the central bank's policy decision for Wednesday's sharp market decline.
"I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy," the president said
"Actually, it's a correction that we've been waiting for for a long time, but I really disagree with what the Fed is doing," the President added.
The central bank hiked rates three times this year and traders widely expect it to raise it once more by the end of 2018.
"Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks and continued trade tension all driving uncertainty," summed up analysts at ANZ.
Elsewhere, Japan's Nikkei 225 plunged 4.2%, and South Korea's KOSPI slid 3.8%.
Down under, Australia's ASX 200 was also down 2.4%.
Earlier this week, the IMF downgraded global economic growth for the first time since July 2016. The fund said in its updated World Economic Outlook that it was now predicting a 3.7% growth, down from the 3.9% growth it forecasted in July.
The IMF and World Bank will hold meetings in Bali later this week.