Asian stock markets tumbled Friday after President Barack Obama proposed a sweeping overhaul of Wall Street banks to avert future financial crises.
Losses spread across most markets and sectors across the region, following an overnight retreat in the U.S. Oil prices rose after trading below $76 a barrel while the dollar lost ground against the yen and euro.
Obama said he would seek to limit the size and complexity of large financial companies so their collapse wouldn't imperil the broader financial system and economy, leading to more bailouts at taxpayers' expense. The move comes amid growing public frustration with Wall Street and bank rescues.
As in the U.S., bank stocks fell in Asia but other industries also suffered steep drops as investors scaled back their riskier bets.
The announcement and Wall Street's reaction spooked a market already on edge over China's recent moves to curb bank lending, said Mark Matthews, strategist at Macquarie Capital Securities in Hong Kong.
Adding to the uncertainty are questions about whether this year's economic prospects justify more gains after the run-up in stock prices that began in early 2009.
Last year "was such an amazing ride and people are starting to wonder if the recovery that we're seeing in 2010 was already priced in," Matthews said.
Japan helped lead Asia's declines, with the Nikkei 225 stock average diving 277.86 points, or 2.6 percent, to 10,590.55. Hong Kong's Hang Seng dropped 301.84 points, or 1.5 percent, to 20,550.17 and Korea's main market index lost 2.2 percent to 1,684.35.
Elsewhere, China's Shanghai benchmark fell 0.6 percent, India's market shed 0.5 percent and Australian stocks retreated 1.6 percent.
U.S. futures pointed to slight gains Friday on Wall Street. S&P futures rose 1.5, or 0.1 percent, to 1,112.60.
In the U.S. Thursday, Wall Street was yanked lower by heavy selling in bank stocks.
The Dow fell 213.27, or 2 percent, to 10,389.88, its biggest point and percentage drop since Oct. 30.
The broader Standard & Poor's 500 index fell 21.56, or 1.9 percent, to 1,116.48. The Nasdaq composite index fell 25.55, or 1.1 percent, to 2,265.70.
Oil prices rose in Asia after early losses, with benchmark crude for March delivery up 11 cents at $76.19 a barrel. The contract dropped $1.66 to settle at $76.08 overnight.
The dollar weakened to 90.27 yen from 90.49 yen. The euro was higher at $1.4135 from $1.4082.