HONG KONG: Asia markets saw big falls Wednesday with fears over a renewed coronavirus surge weighing on global investor sentiment and US equities deepening their retreat from last week's record highs.

Countries around the world are urgently working to accelerate vaccination campaigns and revive their pandemic-ravaged economies, with new variants of the pathogen driving unprecedented infection numbers in some of the worst-hit nations.

While both the Dow and the S&P 500 finished last week at new peaks and also posted their fourth consecutive weekly gains, shares have fallen over the past two days as earnings season enters its second week.

Losses were also sharp in Europe, with both London and Paris ending around two percent lower.

"Global stocks are still plumbing the lows after renewed virus concerns spooked markets overnight," said Stephen Innes of Axi.

"The surge has led to increased travel restrictions and severely dented parts of the priced to perfection reopen trade, leading to renewed concern over the continued economic impact, shrouding a batch of solid corporate results," he added.

Tokyo led the sell-off with the Nikkei down more than two percent by the break after the port city of Osaka -- where hospital beds for seriously ill coronavirus patients have run out -- asked the central government to impose a state of emergency.

Infections there are rising just three months before the country hosts the virus-delayed Olympics, and Tokyo and several other areas are expected to follow in Osaka's footsteps.

Mumbai was bracing for a third day of falls after finishing 0.5 percent down on Tuesday, with India's 1.3 billion people battling a worrying virus surge and record daily case numbers overwhelming already stretched hospitals.

The capital New Delhi was locked down Monday for a week, and the government said all adults would be eligible for a vaccine from May as it tries to get a grip on the crisis.

Hong Kong was down 1.8 percent with Chinese entertainment giant and index heavyweight Tencent tracking the market fall.

Sydney was down 1.6 percent despite stronger than expected retail sales data while Seoul, Wellington and Singapore all fell more than one percent.

'Dwindling fortunes'

Faltering market sentiment saw the greenback rise for the first time in seven trading days while 10-year US Treasury yields fell as traders moved back into safe-haven investments.

"A further setback in US stocks following Monday's decline has read through to a modest reversal in the USD's dwindling fortunes thusfar in April, and also a fresh set-back in US bonds yields back after a fleeting attempt at a rally either side of the weekend," said Rodrigo Catril of NAB.

Covid fears also weighed on commodities, with both major oil benchmarks falling nearly one percent after a rally the previous day.

"Worrying Covid resurgence as the epicentres of crises fall on two of Asia largest importers of crude oil, India, and Japan, which make up over 16 percent of global oil demand," Innes said.

"With new Covid waves bringing risks onshore unless there is a quick reversal of tide, it would likely require a rerating lower of global oil demand forecasts for this year."

Innes added that the "optimistic tone" from Iran nuclear talks could also bolster crude supply.

"A lifting of US sanctions and an accelerated return to total production for Iran would mean some near to medium-term pressure on prices," he said.