A dive in oil prices sent stock markets lower on Monday after producers meeting in Qatar failed to agree on a plan to curb global supply, quashing the more optimistic tone that had prevailed for much of the past week.
Japan's Nikkei index led the way, tumbling more than 3% after a devastating earthquake in the southwest of the country, with signs from a summit in Washington that other Group of 20 governments oppose intervention to weaken the yen also playing a role.
Losses in Hong Kong and Shanghai ranged around 1% and oil prices were down 3%, pushing U.S. crude below $40 for the first time in a week.
Still, the falls on European markets eased as morning trade progressed and Wall Street was set to open only a third of a percent lower, helped by a gain for Morgan Stanley after its profits sank but beat forecasts.
"Energy and equity markets were flashing red this morning, as were commodity currencies like the Canadian and Australian dollars," Societe Generale analysts wrote in a morning note.
"But the scale of the carnage has lessened since London trading opened."
Some 18 oil-exporting nations, including OPEC members, had gathered in Doha, the capital of Qatar, over the weekend in an attempt to agree to stabilize output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in.
Concerns that falling oil prices will thwart efforts to get prices rising across the developed world have been at the heart of worries over growth and the broader health of the economy since the start of this year.
The other big concerns have been Chinese growth and another round of profit warnings and cost cuts at banks. Morgan Stanley's profits fell by more than 50%, but were strong enough compared to expectations to prod shares 2% higher.
"While we see some signs of market recovery, global uncertainties continue to weigh on investor activity," Chief Executive James Gorman said.
The yen, traditionally a target for capital in times of global stress, hit a 3-year high against the euro in response. It rose half a percent against the dollar but was still well short of highs of 107.63 yen per dollar hit a week ago.
Shares in Sony Corp, which has a plant in the Kumamoto area at the center of Saturday's quake, fell almost 7%. Toyota Motor Corp tumbled 4.8% after it suspended production across Japan due to disruptions to its supply chain.
"Many are waiting for the dust to settle as it is not yet possible to quantify the damage in its entirety," said Martin King, co-managing director at Tyton Capital Advisors.
One big exception to the rule was Brazil, where stock market futures jumped 2.5% after a vote to impeach President Dilma Rousseff that looked set to force her from office after 13 years of leftist Workers Party rule.
The real rose more than 1%.