Markets in Asia lost early gains and tumbled into negative territory in afternoon trade, following another selloff on Wall Street overnight on global growth concerns, uncertainty in China and fresh lows in oil prices.

The Shanghai composite touched its lowest level since December 2014, while Hong Kong's Hang Seng index tumbled to a fresh three-year low in another late afternoon sell-off.

Klaus Baader, head of research for Asia at Societe Generale, told CNBC's "Squawk Box" the selloff in equity markets have been "absolutely savage."

"It has very much the feeling of capitulation. I think one of the main reasons why this is happening is there's just so much uncertainty out there. And the uncertainty I think, in particular, relates to China and to what's happening to the global currency construct, where is China's [foreign exchange] policy going. That's one of the things that's really unsettling markets," he said.

Japan's retraced early gains to close down 398.93 points, or 2.43 percent, at 16,017.26, after trading up as much as 1.9 percent earlier in the session. That leaves the index deeper into bear country after losing 3.71 percent in Wednesday's session. The index is down 22.57 percent from its 52-week high of 20,686.03, set in June 2015. The Topix was down 37.48 points, or 2.80 percent, at 1,301.49.



Reuters, citing capital flows data in Japan, said foreign investors remained net sellers of Japanese stocks for the week ending on January 16, selling a net 358.3 billion yen worth of shares. The week before, they sold 746.4 billion yen.

According to reports, Bank of Japan Governor Haruhiko Kuroda said the central bank will stick to its 2 percent inflation target, adding Japan's economic fundamentals remain firm.

Across the Korea Strait, South Korea's Kospi see-sawed between gains of 0.68 percent at market open and losses before finishing down 4.92 points, or 0.27 percent, at 1,840.53.



Down Under, Australian shares closed before the regional sell-off took hold, with the ASX 200 adding 23.37 points, or 0.48 percent, to 4,864.90, buoyed by gains in the energy and materials sectors.

Financials weighed on the index, and among Australia's so-called Big Four banks, NAB was the only bank to finish up, adding 0.30 percent.



Large resources producers Rio Tinto and BHP Billiton finished mixed, up 1.62 percent and down 0.07 percent respectively.

