BANGKOK -- Global market turmoil continued Wednesday as fears intensified that Greece might reject an austerity plan and default on its massive debts.
Asian stocks slumped for a third consecutive day, extending the wave of selling in world markets that was sparked Monday when Greece's prime minister said he would call a national vote on an unpopular European plan that entails painful tax increases and drastic welfare cuts.
Oil fell below $91 a barrel, while the dollar was steady against the euro but lower against the yen.
Japan's Nikkei 225 index tumbled 1.8 percent to 8,673.78. Hong Kong's Hang Seng dropped 0.9 percent to 19,192.72 and South Korea's Kospi index sank 0.9 percent to 1,892.70. Australia's S&P/ASX 200 index lost 0.7 percent to 4,201.40.
Benchmarks in mainland China, Taiwan, Indonesia, Thailand and Malaysia also fell. Singapore's rose.
A top European official warned that Athens could be left to go bankrupt if it went through with the vote and experts said the broader deal -- which hopes to protect larger countries such as Italy from markets panic and was agreed to only last week -- could collapse.
Ultimately, Greece could leave the 17-nation euro currency union, causing financial havoc and pushing the global economy back into recession.
"A no vote could quickly start a chain reaction leading to Greece being forced to leave the Monetary Union. A resulting run on Greek banks could have serious spillover effects on Portugal and Ireland," Citibank analysts said in a report.
That prospect could be enough to keep the referendum from happening -- Papandreou's government could collapse before the proposal goes through, having lost huge amounts of support from its own party.
The possibility of financial contagion spreading across the continent rattled banking stocks. Japan's Mitsubish UFJ Financial Group fell 2.1 percent. Industrial & Commercial Bank of China, the world's largest bank by assets, slid 1.9 percent. Australia & New Zealand Banking Group fell 1.8 percent.
The Dow fell 2.5 percent to close at 11,657.96 on Tuesday. It was the biggest drop since Sept. 22. The S&P 500 lost 2.8 percent to 1,218.28. The Nasdaq composite dropped 2.9 percent to 2,606.96.
Japan's powerhouse export sector fell sharply, a day after data showed that U.S. manufacturing grew more slowly in October, hampered by weak demand for exports.
Mazda Motor Corp. tumbled 4.8 percent, Panasonic Corp. lost 3.3 percent and Sharp Corp. fell 3.3 percent.
Japanese utility Tokyo Electric Power Co. fell 1.3 percent after saying there may be signs of fresh nuclear fission in the No. 2 reactor at its disaster-damaged Fukushima Daiichi power plant.
Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling 1 percent to 2,445.40 and the Shenzhen Composite Index lost 1.3 percent to 1,028.30.
"The loss was due to both to what is happening with Greece and also China's worse than expected manufacturing data, which shows slower growth," said Cai Dagui, an analyst at Ping'an Securities, based in Shenzhen.
Shanghai-listed Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. lost 4.6 percent while Huaxin Cement fell 3.1 percent.
Benchmark crude for December delivery was down 62 cents at $91.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1 to settle at $92.19 in New York on Tuesday.
In currency trading, the euro was steady at $1.3715. At one point Tuesday, the euro fell to $1.3607, its lowest point since Oct. 12. The euro is down nearly 4 percent after hitting a seven-week high Thursday, when the European financial rescue plan was announced.
The dollar slipped to 78.10 yen from 78.33 yen.