Asian shares tracked Wall Street lower on Thursday as weak forecasts from U.S. corporate bellwethers underscored concern over global demand, particularly from China, while rising tensions in the Middle East pulled oil prices off lows.
European stock index futures also pointed to a weaker start, with shares seen falling for a fourth straight session.
At 0602 GMT, futures for Euro STOXX 50, Germany's DAX and France's CAC were down 0.3 to 0.6 percent. Financial bookmakers called Britain's FTSE 100 to open down as much as 0.3 percent.
The euro didn't lose much ground, but was on the backfoot due to uncertainty over Spain's bailout prospects, with S&P's two-notch sovereign downgrade of Spain dampening the mood further.
European stocks and the euro could feel some heat on Thursday because the rating downgrade was announced after markets closed the previous day, but the move by S&P itself was not much of a shock. Rather, markets were reacting to fear that another downgrade would push Spain's rating to junk.
MSCI's broadest index of Asia Pacific shares outside Japan fell 0.4 percent, with the information technology sub-index falling 1.7 percent and the materials sub-index shedding 0.6 percent.
A warning from Chevron Corp over its third-quarter results followed Alcoa's outlook for dwindling aluminum consumption, with both shares falling more than 4 percent and dragging the S&P 500 to its fourth straight loss overnight.
Japan's Nikkei share average posted a third day of losses, shedding 0.6 percent to close at its lowest level in more than two months.
The euro was down very slightly, 0.05 percent lower at $1.2865, above its lowest since Oct. 1 of $1.2835 hit on Wednesday.
"With U.S. stocks falling, and IMF and World Bank raising alarms about the Chinese growth slowdown, market sentiment is against risk - and growth-sensitive or high-yielding currencies are prone to downside risks," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
The International Monetary Fund cut its global growth forecast this week for the second time since April. Ahead of the IMF's twice-yearly meetings in Tokyo, IMF managing director Christine Lagarde said political wrangling was adding to economic uncertainty, slowing growth in both advanced and emerging economies.
She also prodded the world's rich countries on Thursday to take swifter action as Europe's debt crisis drags on.
"We expect action and we expect courageous and cooperative action on the part of our members," Lagarde told reporters.
So, despite stronger-than expected industrial production numbers from Italy and France, as well as a positive U.S. inventories report, investors chose instead to dwell on Chevron's third-quarter warning.
"We think risk assets will perform poorly as long as investors are focused on the third quarter," ING's head of Asian research, Tim Condon, said in a note to clients, while also pointing to improvements in South Korean trade data as a sign things might improve.
AUSSIE FINDS SUPPORT
Australian shares were helped off early lows by data showing a jump in jobs in September and more people looking for work.
The benchmark S&P/ASX 200 index was 0.2 percent lower at 4,483, off a session low of 4,460.4.
The Australian dollar also rose a third of a cent after the government data, which showed employment rose 14,500 in September, compared to forecasts for a slight rise of 3,750. (Full Story).
Oil prices steadied in early Asian trading after having fallen in volatile trading overnight. U.S. crude futures, which fell over 1 percent, were up 34 cents to $91.59 while Brent futures climbed toward $115 a barrel as rising tensions in the Middle East stoked supply fears.
"There's been fairly large price swings sideways for the past two weeks or so," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
"We have a very weak economy so there are worries about oil demand growth while geopolitical issues keep the market supported."
Shelling along the Turkey-Syria border and continued hostility between Iran and the West over Tehran's disputed nuclear programme have reinforced fears about potential threats to oil supplies from the Middle East Gulf.
Spot gold was little changed at $1,763.55 an ounce.
Get all the latest news and videos in your inbox. Register FREE