yahoo TOKYO (AP) -- Asian stocks plunged Wednesday and European shares opened sharply lower after Wall Street chalked its second-biggest point drop in four years and rattled already nervous markets worldwide. ADVERTISEMENT The tumble came just as international markets were recovering in recent days from sharp declines in early March amid concerns about overvalued stock prices and a slowdown in the U.S. economy, a key market for Asian exporters. But those worries resurfaced as troubles at U.S. sub-prime lenders and lackluster retail sales pushed the Dow Jones industrials down nearly 2 percent Tuesday, sparking selloffs across Asia. Stocks in Japan, Hong Kong, South Korea, Malaysia and Australia all fell at least 2 percent, while shares in India, Singapore and the Philippines tumbled more than 3 percent. In Europe, London's FTSE 100 dropped 1.7 percent shortly after the open, while Germany's DAX lost 1.8 percent. France's CAC 40 was also 1.7 percent lower. On the Tokyo Stock Exchange, Asia's biggest bourse, the benchmark Nikkei 225 index sank 501.95 points, or 2.92 percent, to finish at 16,676.89 points. Toyota Motor Corp. and Sony Corp. tumbled. Foreign investors who bought up stocks during the market's recent recovery led the selling, traders said. Hong Kong's Hang Seng index fell 2.6 percent, Indian stocks dropped 3.3 percent, while Philippine stocks plunged 3.4 percent. Overnight, the Dow fell 242.66, or 1.97 percent, to 12,075.96 amid concerns about problems at U.S. sub-prime lenders, who provide mortgages to people with poor credit. Their difficulties raise larger concerns about the housing market and the outlook for the broader U.S. economy. The U.S. Commerce Department also said sales at retailers rose a less-than-expected 0.1 percent in February, suggesting consumer spending might be waning. "The U.S. sub-prime concern has cast a great shadow on Asia. The worry is that it could spill over and cause the U.S. economy to slow down, and this will cause a domino effect on the world economy," said Lee Cheng Hooi, technical analysis manager at EON Capital in Kuala Lumpur. "There could be more bloodbath to come." Still, other analysts maintained that Asia's economic fundamentals remain strong and that the recent round of declines in stock prices were more likely a correction to cool markets that had risen too far too fast over recent months. "The sell-off is in sympathy with the sharp sell-off we saw overnight on Wall Street, and it highlights the continued nervousness out there," said David Cohen, chief of Asian economic forecasting at Action Economics in Singapore. "In perspective you could still say that this is a correction after the strong rally that was experienced for the previous several months around the world," he said. While the U.S. retail sales data and mortgage news that prompted the sell-off on Wall Street "are a little concerning," fundamentals such as strong U.S. jobs data released Friday were still supportive of global equities. "The world economy seems to be remaining on an upward trajectory," Cohen said. The slump reversed a modest recovery in global markets from even bigger losses that started late last month with a 9 percent drop in Chinese stocks Feb. 27, which contributed to a 416-point drop in the Dow later that day. The Shanghai Composite index fell 2 percent Wednesday. After gaining for six straight sessions the market was primed for a retreat, analysts said. In India, jittery investors sold off almost every blue chip stock, dragging the benchmark Sensex index down 3.3 percent to 12,559 points. The decline was across the board. Losers included Tata Motors Ltd., ICICI Bank Ltd., and Wipro Ltd. "Global factors have aided the fall in Indian markets," said Jayant Pai, vice president of brokerage Parag Parikh Financial Services. "Valuations here were high and we will see more of a fall than in the rest of the world." Indian shares have seen wild swings each time the global markets have turned weak. The Sensex fell a stunning 43 percent in May-June last year -- only to bounce back to hit record highs. The Sensex reached an all-time high of 14,643 on Feb. 7, before losing about 2,000 points, or 14 percent, in the latest round of declines. Elsewhere, Sydney's S&P/ASX 200 fell 2.1 percent, Singapore's Straits Times benchmark sank 3.3 percent, and South Korea's Kospi closed 2.0 percent lower. Associated Press Writers Gillian Wong in Singapore, Eileen Ng in Kuala Lumpur, Rajesh Mahapatra in New Delhi and Toby Anderson in London contributed to this report.