SYDNEY, NSW, Australia - Stocks in Asia mostly sank on Thursday, following on from a rout on Wall Street overnight.

"There may be short-term bounces in equities like the last few days, but the big picture is that the era of low yields is over, and we are transitioning to a higher rates environment," Bilal Hafeez, CEO of London-based research firm MacroHive told the Reuters Global Markets Forum Thursday.

"This will pressure all the markets that benefited from low yields - especially equities," he said.

In Japan, the Nikkei 225 shed 508.36 points or 1.89 percent to 26,402.84.

The Australian All Ordinaries slumped 123.30 points or 1.66 percent to 7,303.30.

In New Zealand, the S&P/NZX 50 dipped 51.35 points or 0.46 percent to 11,206.93.

The Kospi Composite in Seoul, South Korea declined 33.64 points or 1.28 percent to 2,592.34.

Going against the trend, China's Shanghai Composite gained 10.99 points or 0.36 percent to 3,096.96.

In Hong Kong, the Hang Seng fell 523.62 points or 2.54 percent, to close Thursday at 20,120.68.

The U.S. dollar was cautiously sold off, but the majors struggled to hold their strength. The Australian and New Zealand dollars which had rallied overnight, and continued stronger during the Asian trading zone, were withering as the Asian day was drawing to a close. The Australian dollar which had moved comfortably above 0.70 cents, was changing hands at 0.6969 around the Sydney close. The New Zealand dollar was marked down to 0.6313, trimming earlier gains.

The euro maintained some of its overnight strength but without conviction. The EU unit last traded at 1.0482 as European traders were arriving at their desks. The British pound eased to 1.2349. The Japanese yen and Swiss franc were both little changed at 128.31 and 0.9820 respectively. The Canadian dollar too was steady at 1.2855.

Overnight on Wall Street, the Dow Jones industrials plummeted 1,164.52 points or 3.57 percent to 31,490.07.

The Nasdaq Composite shed 566.37 points or 4.73 percent to 11,418.13.

The Standard and Poor's 500 dropped 165.17 points or 4.04 percent to 3,922.68.