With Clinton until last week comfortably ahead, traders were upbeat about her chances of winning on November 8 but news Friday that the FBI were again looking at her emails has raised the prospect of Trump becoming president.
Trump is viewed as a wildcard, in part because of his harsh criticism of Federal Reserve chief Janet Yellen and international trade pacts.
‘Since the FBI reopened its case into Hillary Clinton's emails last Friday, her substantial lead in the polls has been decimated and some now even show Trump in the lead,’ Craig Erlam, a senior market analyst at OANDA, said in a note.
‘It's been clear for some time now that markets would much prefer the stability that a Clinton victory would bring for the US economy and the reaction over the last 24 hours or so since the polls started to change so dramatically just confirms this. Trump risk is well and truly being priced in again.’
The news battered markets on Wall Street and in Europe, while the VIX volatility index, which is seen as a measure of the US market's fears, was sitting near levels last seen after Britain voted in June to leave the EU.
- US rate uncertainty -
Those losses filtered through to Asia, where Tokyo closed 1.8 percent lower, while Hong Kong dived 1.4 percent in late trade and Shanghai ended down 0.6 percent.
Sydney and Seoul each sank more than one percent and there were also sharp losses in Wellington, Manila and Taipei.
Currency traders also took fright, fleeing into the safe-haven yen. The greenback fell to 103.86 yen in Tokyo, down from 104.12 yen in New York and well off the levels of above 105 yen seen Tuesday.
Analysts say a Trump win could also lead the Federal Reserve -- which ends a policy meeting on Wednesday -- to put off an expected December interest rate hike owing to worries about his effect on the economy.
‘Even if the Fed does signal an inclination to lift rates in December, markets will take the view that this is unlikely if a Trump victory leads to uncertainty and a surge in financial-market volatility,’ Ric Spooner, chief market analyst in Sydney at CMC Markets, said in an e-mail to clients, according to Bloomberg News.
However, the dollar was sharply up at 19.32 Mexican pesos from 18.85 pesos Tuesday. The peso is considered a proxy for Trump's chances owing to his anti-Mexican rhetoric throughout the campaign including his pledge to remove undocumented migrants, build a wall and tear up a trade deal.
The greenback also rallied against higher-yielding, risker Asia-Pacific units, soaring 0.9 percent against the South Korean won and 0.5 percent versus the Australian dollar.
A week-long retreat in oil prices also extended in Asia, with both contracts down almost a tenth from recent highs as investors grow worried about the chances of success for OPEC's September agreement to cut output.
- Key figures around 0700 GMT -
Tokyo - Nikkei 225: DOWN 1.8 percent at 17,134.68 (close)
Hong Kong - Hang Seng: DOWN 1.4 percent at 22,813.88
Shanghai - Composite: DOWN 0.6 percent at 3,012.73 (close)
Euro/dollar: DOWN at $1.1054 from $1.1056 Tuesday
Dollar/yen: DOWN at 103.86 yen from 104.12 yen
Pound/dollar: UP at $1.2244 from $1.2241
Euro/pound: UP at 90.38 pence from 90.32 pence
Oil - West Texas Intermediate: DOWN 37 cents at $46.30 per barrel
Oil - Brent North Sea: DOWN 31 cents at $47.83
New York - Dow: DOWN 0.6 percent at 18,037.10 (close)
London - FTSE 100: DOWN 0.5 percent at 6,917.14 (close)