Asian shares turned tail on the first trading day of the new year as more disappointing economic data from China darkened the mood and upended US stock futures.
MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.6% as a private sector survey showed China manufacturing activity contracted for the first time in 19 months.
The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for December fell to 49.7, from 50.2 in November, and followed a poor official survey on factory output.
"Even more eye-catching was that 'new orders' in both PMIs fell from expansion in November to contraction in December," said analysts at ING.
"This confirms our view that the economy is weak and that stimulus needs to arrive quickly."
The Shanghai blue chip index quickly shed 1.2% and South Korea fell 1.5%. Japan's Nikkei was closed for a holiday.
E-Mini futures for the S&P 500 were stripped of early gains to be down 0.8%, while FTSE futures dropped 0.6%.
Spreadbetters also pointed to opening losses for the other main European bourses.
The Australian dollar, often used as a proxy for China sentiment, lost as much as 0.7% to its lowest since February 2016 at $0.70015.
The safe-haven yen extended its broad rally as the US dollar dropped to 109.37, its lowest since June last year.
The dollar was otherwise mixed, edging up a little on the euro to $1.1445 and steady on a basket of currencies at 96.189.
The dollar has been dragged by a steep fall in Treasury yields in recent weeks as investors wagered the US Federal Reserve would not raise rates again, even though it is still projecting at least two more hikes.
