Tokyo - Asia-Pacific stocks took dives Thursday amid bearish sentiment triggered by Wall Street's sharp overnight losses as well as a dismal global and regional economic outlook.

The market in the region's largest economy, Japan, also dipped as a stronger yen dimmed sales prospects among the country's export-oriented manufacturers.

The Nikkei 225 Stock Average fell 2.46 per cent to close at 8,460.98. The benchmark index recovered significant ground after losing more than 7 per cent in morning trading and hitting a five-year low.

The broader Topix index of all first-section issues also fell 1.97 per cent to 871.7.

Markets in other countries in the region saw far higher losses with the biggest in South Korea, where the Kospi index shrank 7.48 per cent to 1,049.71 after falling as much as 9.4 per cent earlier in the session.

The won, which has been in a freefall, dropped to a 10-year low against the dollar and triggered worries about South Korea's overall economy.

Hong Kong's Hang Seng index shed 3.55 per cent of its value to close at 13,760.49, dipping below 14,000 for the first time in three years.

In Australia, the ASX 200 plunged 4.3 per cent to 3,974. The benchmark index has lost a third of its value so far this year.

Market leader BHP Billiton Ltd lost 8 per cent on the day and fellow resources company Rio Tinto Ltd shed 16 per cent.

Falling commodity prices and fears of a global recession also hurt the local currency with the Australian dollar trading at 66 US cents -1 cent off its five-year low.

Singapore's Straits Times Index took a 3.6-per-cent dip to 1,755.5, pacing losses in South-East Asia.

Investor sentiment was hit by losses in the region on Wednesday as well as overnight tumbles in the United States, where a series of depressing earnings reports offered more signs of a sharp economic downturn at home and abroad.

The Standard & Poor's 500 Index there dropped 6.1 per cent and hit its lowest level since April 2003 while the Dow Jones Industrial Average lost 5.69 per cent.

The Wall Street losses prompted a nearly 4-per-cent drop in Taiwan's Taiex index when it opened, but buying by government funds helped ease the slide to 2.72 per cent by the close, when the Taiex stood at 4,730.51.

In India, the benchmark Sensex index was off by 3.01 per cent, and the broader 50-share Nifty index was falling by 3.26 per cent in mid-afternoon trading.

Losses in mainland China were more moderate with Shanghai Composite Index down 1.07 per cent at 1,875.56. The Shenzhen Composite Index bucked the day's trend, rising 0.76 per cent to 514.56 after the government announced measures to boost the lagging housing market.

In South-East Asia, the Philippine Stock Exchange's 30-share composite index slid 4.63 per cent, the Jakarta Composite Index fell 3.08 per cent, the Ho Chi Minh Stock Index slumped 3.86 per cent and the Kuala Lumpur Composite Index dropped 1.43 per cent. Thailand's market was closed for a holiday.

Investors were dumping exporters' stocks in the region as well as investments seen as riskier than business stalwarts.

In Vietnam, traders scrambled to sell after the previous day's plunges around the world and on fears that foreigners would withdraw from the local exchange despite the central bank's cut Tuesday of its prime interest rate from 14 to 13 per cent.

"That fact that foreigners were net sellers over the past 10 sessions has made local traders worried," said Phan Hong Quan, director of Eurocapital Securities.

New Zealand's NZX50 index fell 3.18 per cent to 2,807.34 despite an unprecedented 1-percentage-point cut in the central bank's benchmark interest rate to 6.5 per cent - the third cut in 13 weeks. (dpa)