Asian markets remained under pressure on Tuesday after Wall Street posted its biggest declines since late 2008.

Falls of as much as 10% were seen in early trading, and Japan's Nikkei 225 index closed 1.7% lower, with South Korea's Kospi down 3.6%.

However, by the end of Asian trading, some markets had rebounded, while others pared losses.

Analysts said that a number of stocks had lost so much in recent sessions that they looked like good value again.

"Fear and anxiety ruled the morning session, with broad based capitulation giving way to some mild buying and serious short covering this afternoon," Ben Potter of IG Markets in Melbourne said in a research note.

The early declines on Tuesday were triggered by worries that a recession in US would hurt Asia's export-led economies.

On Monday, the Dow Jones stock index dropped 5.6% in New York despite US President Barack Obama trying to reassure investors.

"You have the onset of fear in the market. There are a lot of things that don't make sense," Peter Esho, chief market analyst at City Index, told the BBC.

Sharp falls

Asian markets were in a tailspin early on Tuesday, with some seeing their value drop to its lowest levels in many months.

Japan's Nikkei 225 fall below 9,000 points for the first time since the country was hit by a deadly earthquake and tsunami on 11 March. It closed at 8,944.48.

South Korea's Kospi index saw trading suspended briefly, dropping nearly 10% early on Tuesday. Hong Kong's Hang Seng, which closed down 2.3% declined as much as 7% at one point.

However, the late rebound in many prices meant that Australia's S&P/ASX 200 finished up 1.2%, while Taiwan's stock index ended little changed.

Analysts warned that markets may remain under pressure in coming days as a number of issues have created the current market pessimism.

European markets continued the global decline when they opened on Tuesday.

London's FTSE 100 index fell 4.1%, Germany's Dax is down 5.7% and France's Cac has dropped by 2.4%. Bank shares are among the worst hit with RBS down 10%, Barclays falling 7.5% and HSBC 6.9% lower.

At the heart of the sell-off is the fear that ongoing debt problems in the US and Europe will slow economic growth and dent corporate profits.

I'm surprised how far it has fallen in all markets, this is panic Jeremy Friesen, Societe Generale

On top of that, on Friday the US had its triple A credit rating cut by Standard and Poor's for the first time in history, adding to the sense of gloom surrounding the world's biggest economy.

"What's rocking the market is a growth scare," said Kathleen Gaffney of Loomis Sayles.

She said investors were concerned about "how Europe and the US are going to work their way out of a high debt burden" if the global economy slows.

Broader issues

Other asset classes were also impacted on Tuesday. Crude oil prices continued to slide amid concerns that demand would wane in coming months.

Analysts said just like stock markets, the fall in oil prices was being driven by fear.

"I'm surprised how far it has fallen in all markets, this is panic," said Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong.

"Demand hasn't pulled back in the past day, it's just speculation that it will," he added.

Gold, meanwhile, hit a new record as investors looked for assets that are considered to be less risky. The Swiss franc also gained.

Image caption Asian markets saw panic selling early in the day but recovered some of the losses by the end of trading

Analysts said that while economies in Asia had been growing robustly and the outlook for the region remained positive, a slowdown in the US and Europe could hurt growth significantly. Not least because the stock market slump may put off consumer and corporate spending.

Rajiv Biswas of IHS Global Insight told the BBC that investors were also worried that the cut in the US credit rating would force a serious reining in of budgetary spending.

"That will be a big drag on growth," he said.

Mr Biswas added that there was "little doubt" that a slowdown in the US and Europe would hurt growth and trade in Asia.

Analysts said that Asian economies may now have to revise their own economic projections as a result. On Monday, Singapore cut its growth forecast for this year to between 5-6%, down from 5-7%.

"The discussion now in Asia is to have a look at growth assumptions and perhaps even to revise numbers that could be a little too optimistic in light of what is happening in the markets," said City Index's Mr Esho.