SINGAPORE, Aug. 16 — Stocks in Asia continued their downward spiral today amid the widening fallout from the United States’ subprime mortgage crisis. The decline was led by shares in South Korea, as local investors returned from a national holiday there and joined the stampede by foreign investors trying to sell.

Across Europe, markets were also sustaining heavy losses in early trading.

And markets in the United States were expected to open lower again today. Stock index futures fell sharply following the latest sign that the Federal Reserve is reluctant to cut rates in the midst of the markets’ turbulence, Reuters reported. “It’s a kind of a panic among individual investors,” said Cho Hong Rae, head of research at Korea Investment & Securities in Seoul, adding that domestic retail investors had up until today generally been buying shares as they declined.

(A trader at the Hong Kong Stock Exchange. Hong Kong's share prices were down 3.3 percent or 703.33 points today, amid investor fears over the fallout from the U.S. credit market crisis.)

The South Korean benchmark stock index suffered its biggest decline in more than five years today, falling nearly 7 percent late in the afternoon in Asia after an initial 10 percent plunge that forced the Korea Exchange to suspend trading for 20 minutes.

Similar declines occurred in Indonesia and the Philippines, where stocks also fell by roughly 7.7 percent and 6 percent, respectively. Declines in the region’s other big markets were less severe, but still dramatic: Japan’s benchmark Nikkei 225 stock average fell by about 2 percent; and Hong Kong’s benchmark dropped by about 3.5 percent.

Chinese stocks were lower too. During recent trading sessions, they have brushed off drops in other parts of the world.

Australia was also hit today by more repercussions from the credit crisis in the United States. Rams Home Loans Group, a nonbank lender which earlier in the week warned that its earnings could be hurt by rising costs for its United States borrowings, confirmed today that it had been unable to refinance $5 billion in debt.

Analysts in Australia said Rams’s problems were unlikely to have much effect on the country’s banks, because they do not rely significantly on borrowing from the United States.

“In the end the impact on them will not be so severe,” said Ben Zucker, an analyst at Macquarie Bank in Sydney.

Nonetheless, companies and financial institutions that had taken advantage of a booming American appetite for debt to borrow United States dollars cheaply and fund costs at home in Australia where the currency has been appreciating are likely to suffer a sudden whiplash effect now as interest rates rise and the United States dollar regains ground, he said.

In South Korea, Mr. Cho said that most domestic selling was still by individuals trying to unload individual stocks. So far, he said, local mutual funds were not seeing a market increase in redemptions that would force them to join the selling. And automatic contributions to pension funds were still being made to big institutions, which were taking advantage of the latest declines to buy stocks more cheaply, he said.

Mr. Cho said that Korean financial institutions, like others around Asia, had only small direct exposures to United States subprime mortgages. Having suffered through the Asian financial crisis and a similar blowout in personal debts in 2002, Korean banks have become relatively conservative, he said.

So have Korean regulators, who Mr. Cho said have been putting the brakes on the property market by boosting restrictions on how much banks can lend for property investments.

As a result, Mr. Cho said, property prices have stagnated, but borrowers are less likely to default because they took on too much debt.

But the same might not hold true of Korean companies. In a report last month examining the creditworthiness of Asian companies, Lehman Brothers strategist Paul Schulte observed that some of the biggest gains by Korean stocks had come in shares of companies with a high reliance on debt financing.

A somewhat brighter picture has emerged in Australia. Notwithstanding Rams’s predicament, which was caused by its borrowing, the quality of mortgages in Australia has been steadily improving, according to Mr. Zucker. After several years of slumping prices in big eastern markets like Sydney and Melbourne, prices are now picking up. With joblessness at record lows and Australian economic growth quickening, banks still appear to be on solid footing, he said.

Shortly after the open in Europe, London’s FTSE 100 was down about 2 percent to 5,982.60; in Frankfurt, Germany, the Dax Index was down about 2 percent to 7,299.79; and markets in Stockholm, Madrid and Milan were also down about 2 percent.

In the United States, the decline in the stock index futures follows comments from William Poole, St. Louis Federal Reserve Bank president, after Wednesday’s stock market close. He said that the market turmoil has not undermined the United States economy and there is no need for an inter-meeting rate cute, Reuters reported.