SINGAPORE -- Stocks in Asia tumbled, with South Korea and Australia nursing falls of almost 5.0 percent as growing fears of a US recession sparked panic, sending investors to safe-haven government bonds.

Industrial metals, such as zinc and copper plunged and oil fell on concern any recession could hit demand.

The yen rose hit a 2-1/2-year high against the dollar as investors reduced their exposure to risky, higher-yielding assets. The strong yen hit Japanese exporters, such as Toyota Motor Corp. and Sony Corp.

"I am sure we are in a bear market, because the mood is very negative. People no longer believe that stocks are the road to riches," Cannae Capital Partners managing director Hugh Giddy.

"This may be a long slow grind down because earnings expectations will start to fall."

MSCI's All Country World Index fell 0.7 percent to its lowest level since November 2006 after European shares fell nearly 6.0 percent on Monday, their biggest one-day slide since the Sept. 11, 2001 attacks. MSCI's Emerging Market index, which suffered its worst daily fall since August on Monday, shed almost 1.0 percent.

Treasuries surged, with 10-year futures vaulting more than a full point to a nearly five-year high as alarmed investors sought the relative safety of government debt.

US equity markets, shut on Monday for a holiday, closed on Friday with their worst weekly performance since mid-2002 while Asian and European equities plunged on Monday, showing a clear lack of confidence in Washington's proposed fiscal stimulus worth up to $150 billion.

US stock index futures fell around 5.0 percent, presaging a sharp sell-off on Wall Street later.

Billionaire investor George Soros said the world was facing the worst financial crisis since World War Two and the United States was threatened with recession, according to an interview with the Austrian daily Standard.

"We really do have a serious financial crisis now," Soros was quoted as saying.

Japan's Nikkei fell 4.7 percent by 0056 GMT, its worst daily fall since August. The index has shed around 17 percent just this month alone as fears deepened that the US subprime mortgage crisis will drag global financial markets lower.

South Korea's technology stocks -- heavily dependent on the US export market -- were mauled, pushing the Korea Composite Stock Price Index down 4.2 percent to its worst level since May.

Australia's S&P/ASX 200 index shed 5.0 percent to record its 12th straight session of declines. It hit a low of 5,293.6 -- its lowest intraday level since October 2006.

Mining stocks, sensitive to any economic slowdown, led the decline. BHP Billiton fell 5.6 percent and Rio Tinto tumbled almost 10 percent.

Recession fears hit oil, with crude sliding to a 13-week low, trading nearly 12 percent off a record high of $100.09 hit on Jan. 3.

US crude fell 60 cents from the previous session, to $88.20 by 0101 GMT, the lowest since Oct. 12. Editing by Jean Yoon