In Japan, the benchmark Nikkei-225 index of the Tokyo Stock Exchange fell 4.07 percent, or 370.58 points, to 8,726.98 in midmorning trade, adding to a 2.18 percent plunge on Monday.
South Korean shares also shot lower, dropping more than five percent, with the benchmark Kospi index down at 1,775.78.
"The global sell-off in equities is likely to continue, but we are close to seeing a selling climax," Hiroichi Nishi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.
As fear continued to dominate following Standard & Poor's unprecedented downgrade of the United States on Friday, Australian share prices fell 4.4 percent, losing 173.2 points to 3,812.9.
New Zealand, the first in the Asia-Pacific to open, dropped 3.1 percent. With the US Federal Reserve board meeting later Tuesday, a