BANGKOK (AP) — Asian stocks skidded lower Thursday, stung by the Federal Reserve's pessimistic assessment of the U.S. economy and the perceived ineffectiveness of measures taken to kickstart growth again.
Benchmark oil fell below $85 a barrel while the dollar strengthened against the euro and the yen.
Japan's Nikkei 225 slumped 1.6 percent to 8,598.32 and South Korea's Kospi slid 2.6 percent to 1,806.62. Hong Kong's Hang Seng dived 3.6 percent to 18,138.32. Australia's S&P/ASX 200 was 2.2 percent down at 3,984.40.
Benchmarks in New Zealand, Singapore and Taiwan were also lower.
Investors were beginning to despair over the U.S. economy despite an announcement by the Fed of a new bond-buying program meant to stimulate lending and growth.
"What we could or should do has already been done — and it still hasn't supported the market. Nothing can help the market. So it feels very dangerous," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.
"I expect panic selling," he said. Then, "hopefully the market will find its short-term bottom."
Energy shares in Australia plummeted amid fears of a global economic slowdown. BHP Billiton, the world's largest mining company, lost 4.3 percent. Rival Rio Tinto Ltd. plunged 6.8 percent. OZ Minerals dropped 7.2 percent.
In Hong Kong, blue chip property developers were among the biggest losers. China Resources Land Ltd. tumbled 9.8 percent while China Overseas Land & Investment slid 7.3 percent. China Vanke Co. lost 9.2 percent.
Falling gold prices hit precious metal stocks. Hong Kong-listed Zijin Mining Group, China's No. 1 gold miner, lost 7.2 percent. Newcrest Mining, Australia's biggest gold miner, fell 3.1 percent.
Ben Potter of IG Markets in Melbourne, Australia said in a report that he expects "a session of heavy selling as the world reacts to the Fed's downbeat outlook for the US economy."
In a highly anticipated move, the Fed on Wednesday announced it would buy long-term Treasury bonds to help the U.S. economy. But Wall Street stocks fell anyway because the U.S. central bank made it clear that a full U.S. economic recovery was likely years away. Stocks recently have been extremely volatile over fears of another recession.
The Dow Jones industrial average lost 2.5 percent to close at 11,124.84. The Standard & Poor's 500 index fell 2.9 percent to 1,166.76. The Nasdaq composite fell 2 percent to 2,538.19.
The Fed said after a two-day meeting that it would buy long-term Treasurys and sell short-term. The move is intended to drive down interest rates on long-term government debt, and could lower rates on mortgages and other loans. It surprised investors when it said it would include more 30-year bonds in its purchases than expected.
The Fed said it would buy $400 billion in 6-year to 30-year Treasurys by June 2012. Over the same period, it planned to sell $400 billion of Treasurys maturing in 3 years or less.
The inclusion of more 30-year bonds than expected means the Fed saw the need to keep very long-term rates lower for an extended period. Many analysts viewed the move as an acknowledgment that the U.S. economy's problems are long-term.
The Fed also bleakly stated that the economy has "significant downside risks" and that a number of problems won't be easily solved, including high unemployment and a depressed housing market.
On top of that: a sovereign-debt crisis in Europe that is threatening to bankrupt Greece, cause Italy to default on debts and infect the continent's banking system.
The price of oil, meanwhile, continued its slide on expectations that there'll be less demand for energy amid U.S. economic doldrums.
Benchmark crude for October delivery was down $1.48 per barrel to $84.44 in electronic trading on the New York Mercantile Exchange. The contract fell $1.00 to settle at $85.92 on the Nymex on Wednesday.
In currency trading, the dollar rose to 76.77 yen from 76.56 yen late Wednesday in New York. The euro fell to $1.3534 from $1.3667.