Hong Kong's Hang Seng index and Australian shares fell 2 per cent and Chinese blue-chips were 0.2 per cent lower.
The Indian equity benchmarks are set to open sharply lower on Thursday, ahead of monthly expiry of futures and option contracts, on the back of weak global cues. The Nifty Futures on Singapore Exchange indicated a sharply lower opening for Nifty. The Nifty Futures on Singapore Exchange also known as SGX Nifty Futures fell 1.7 per cent or 298 points to 16,923.
Asian shares fell to their lowest in more than 14 months, short-term U.S. yields rose to 23-month highs and the dollar strengthened on Thursday after the Federal Reserve's chairman signaled plans to steadily tighten policy.
At the same time, rising investor concerns over political tensions between Russia and Ukraine exacerbated worries over tight energy market supply, keeping oil prices elevated at multi-year highs.
In its latest policy update on Wednesday, the Fed indicated it is likely to raise U.S. interest rates in March, as has been widely expected, and reaffirmed plans to end its bond purchases that month before launching a significant reduction in its asset holdings.
But in the follow-up press conference, Powell warned that inflation remains above the Fed's long-run goal and supply chain issues may be more persistent than previously thought.
Concerns that the Fed will increasingly prioritise fighting inflation walloped share markets, erasing a Wall Street rally.
Asian shares also tumbled, with MSCI's broad gauge of regional markets outside Japan down 1.6 per cent in early trade on Thursday at its lowest level since early November 2020.
Hong Kong's Hang Seng index and Australian shares fell 2 per cent and Chinese blue-chips were 0.2 per cent lower.
In Tokyo, the Nikkei fell 1.9 per cent, touching its lowest point since December 2020, news agency Reuters reported.
Back home, United Spirits will be in focus after it reported net profit of Rs 291 crore in quarter ended December 2021, marking an increase of 27 per cent from the same period last year.
Nippon Asset Management, Canara Bank, RBL, Bank, BHEL, Punjab National Bank, Indus Tower, LIC Housing Finance and Wockhardt will be in focus as they will report their December quarter earnings on Thursday.