Korea's main KOSPI index buckled, losing more than 72 points as soon as the market opened for trading on Tuesday but did manage to claw back to 1,448 before closing.

The situation was no different in Japan, where the benchmark Nikkei 225 index lost over 4 percent to 11,399. Major stock indexes in Hong Kong and Australia slid more than 2 percent.

Some market experts in Korea say looming fears of a prolonged financial meltdown on Wall Street, an interest rate hike in Korea and a weakening won against the greenback have dashed hopes of a swift recovery.

The ripple effect from Wall Street coupled with Korea's inflation jitters and a rising trade deficit, economists say, could possibly drag the KOSPI down to the 1,300 mark.

Kim Hak-joo, an analyst at Samsung Securities, said, "The benchmark KOSPI is expected to move between the 1,320 and 1,540 mark. For now, the U.S. financial crisis seems to have stabilized, but we anticipate a 'second shock,' which entails a serious contraction in consumer spending because people have spent so much in the past."

Securities analysts in Korea believe a notable rebound is not forthcoming considering other negative economic factors. But they say a turnaround will largely depend on the passage of the U.S. emergency rescue plan.

Arirang News.