Stocks in Asia Pacific tumbled on Monday as the U.S. Federal Reserve slashed its benchmark interest rate to zero and launched a massive quantitative easing program in an emergency move on Sunday.

The S&P/ASX 200 in Australia led losses among the region's major markets as it dropped 9.7% to close at 5,002. That was its largest ever daily drop, according to Reuters.

The heavily weighted financial subindex dived 11.1% as shares of the Australia's major banks saw steep declines: Australia and New Zealand Banking Group plunged 12.5%, Commonwealth Bank of Australia slipped 10.01%, Westpac fell 11.81% and National Australia Bank plummeted 12.44%.

Mainland Chinese stocks dropped on the day as well, with the Shanghai composite 3.4% lower at about 2,789.25 while the Shenzhen composite slipped 4.834% to approximately 1,712.02. The Shenzhen component plunged 5.34% to 10,253.28.

Hong Kong's Hang Seng index also fell 4.38%, as of its final hour of trading.

In Japan, the Nikkei 225 closed 2.46% lower at 17,002.04. The Topix index was also 2.01% lower to end its trading day at 1,236.34. South Korea's Kospi slipped 3.19% to close at 1,714.86.

Elsewhere, Singapore's Straits Times index dropped 4.27% in afternoon trade while the Nifty 50 in India plunged 5.11%.

Overall, the MSCI Asia ex-Japan index declined 4.99%.

Investors watched for market reaction to the Fed's latest actions. The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consumer rates, will now be targeted at 0%-0.25% down from a target range of 1% to 1.25%.

Following the Fed decision, U.S. stock futures fell sharply. Stock market futures hit "limit down" levels of 5% lower, a move made by the CME futures exchange to reduce panic in markets. No prices can trade below that threshold, only at higher prices than that down 5% limit.

"This isn't stimulus, this is ... activity that prevents a meltdown, in a way," Daniel Gerard, senior multi-asset strategist at State Street Global Markets, told CNBC's "Squawk Box" on Monday. "That's the goal here, the Fed coming out so strong is to prevent a crisis."