Asian equities slid on Tuesday after signs of a deepening global economic slump slammed stocks worldwide the previous day, driving benchmark US Treasury yields to their lowest since the 1950s.

Adding to the gloom, the US economy was confirmed to have fallen into a recession nearly a year ago and Federal Reserve Chairman Ben Bernanke said the central bank is mulling extreme policy measures such as buying more government bonds to revive growth.

An array of reports showing manufacturing activity around the world contracted at the sharpest pace in a decade or more put focus on the pain the credit crisis has inflicted on companies and households.

Safe-haven government bonds climbed, while oil prices fell to a 3-1/2-year low on the dour outlook for global demand. But the yen slipped as some Japanese investors shifted funds into foreign assets.

The MSCI index of Asia-Pacific stocks outside Japan dropped 3.5 percent, taking this year's losses to 57 percent. Hong Kong's Hang Seng index fell 5 percent and was among the hardest hit in the region.

"The (US business cycle) committee's recession statement confirmed what people have long suspected but were not sure of, and combined with the US factory data, which confirms the gravity of the ongoing recession, stoked worries about how much longer the world's largest economy will be submerged in economic downturn," said Bae Sung-young, a market analyst at Hyundai Securities in Seoul.

Japan's Nikkei average shed 4.6 percent as the yen's surge added to the pain for the country's big exporters, that have suffered a double-whammy from tumbling demand and currency strength shrinking the value of overseas earnings.

... contd.