Tokyo fell sharply, with the news from Washington still fresh
Stock markets across Asia fell sharply, with some losing over 4% of their value, after a US financial rescue plan failed to get through Congress.
Australia's S&P/ASX-200 index fell 4.3%, while Japan's main Nikkei index ended 4.1% down - a three-year low.
But after an initial precipitous fall, Hong Kong's Hang Seng managed to buck the trend, ending up 0.8%.
The volatility came after the US Dow Jones index saw its biggest one-day points fall, dropping nearly 7%.
In a shock move, the US House of Representatives rejected a $700bn (£380bn) plan to bail out Wall Street.
Day of turmoil
The House's rejection of the bail-out plan came after a day of turmoil in the US and Europe, with Wachovia, the fourth-largest US bank, being bought by larger rival Citigroup.
Asia was quick to react to the shock rejection.
In Japan, the benchmark Nikkei stock 225 index fell 483.75 points, or 4.12%, to close at 11,259.86 - the lowest level since 9 June 2005. Taipei shed 3.6%.
But some indices erased losses, with Sydney closing 4.3% down after falling as much as 5.3% and South Korea's Kospi ending down 0.6% after falling as much as 5%.
In Hong Kong, it was a day of drama with shares ending up 0.8% after falling more than 6% at one point.
New Zealand, the Philippines, Singapore and Indonesia all lost ground.
Markets in mainland China are closed this week for National Day celebrations.
In the face of such volatility, regional leaders tried to reassure investors.
"Taiwan's economic fundamentals are still good," President Ma Ying-jeou said in a speech at a local event, reported Reuters news agency. "We have the means to weather this global financial crisis."
Meanwhile Thai Prime Minister Somchai Wongsawat said the situation remained manageable and urged investors "not to be alarmed".
But others rued the failure of the US Congress to pass the emergency bail-out.
"It will have a big impact on the US economy, and it will also greatly affect the global economy," said Japanese Economics Minister Kaoru Yosano.
Australia's Prime Minister Kevin Rudd said it was a "bad development".
He said he had spoken to his British counterpart Gordon Brown and they agreed to urge the US Congress to push through the plan.
Other countries, such as Indonesia and South Korea, say they will follow US and EU regulators in banning or restricting short-selling of stocks to curb instability in the stock markets.
Meanwhile, the Bank of Japan pumped another 3 trillion yen ($28.7bn; £15.8bn) into money markets as part of the co-ordinated effort by the world's central banks to boost liquidity and lending.
It is the 10th consecutive working day that it has put money into the domestic system.
The US rescue plan, a result of tense talks over several days between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.
About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.
Henry Paulson: 'This is much too important to simply let fail'
After talks with the president, Treasury Secretary Henry Paulson said the government's plan to address the crisis facing the US financial sector was much too important to be allowed to fail.
He added that he would be working with congressional leaders to get something done "as quickly as possible".
Analysts say that without a bail-out plan, the banks will be left to handle all their own bad mortgage debt as best they can, and more of them will be in danger of going bust.
But after several hours of impassioned debate, the bill's opponents - the majority of whom were from the Republican Party - got their way.
They had raised concerns about both the content of the plan and the speed with which they were being asked to pass it.