Hong Kong stocks tumbled more than two percent on Tuesday morning after Moody's downgraded the city's credit rating, while traders were also spooked by a deadly SARS-like virus that is spreading in mainland China.
The Hang Seng Index fell 2.29 percent, or 659 points, to 28,136.
Tokyo ended the morning 0.8 percent lower, Shanghai was down 0.8 percent and Singapore sank more than one percent. Sydney lost 0.4 percent, Seoul shed 0.5 percent and Manila was off 0.6 percent.
Moody's had explained its downgrade in a statement, saying "The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody's had previously assessed."
The move comes as the business community grows increasingly worried the features that give Hong Kong more political and economic autonomy are weakening under pressure from Beijing.
The decision came four months after a similar move by Fitch, which cited the demonstrations and uncertainty caused by closer integration with the Chinese mainland.