Malaysian stock market suffered its biggest single-day decline since January this year, after the World Bank lowered its growth forecast for the world economy, driving investors into fear that stocks in emerging countries may enter into a bear market.

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index fell by 1.8 per cent or 32.25 points to 1,742.87, dipping below its 1,750 support level.

More than 800 stocks registered a decline, with only 142 counters recorded gains. 648 counters were unchanged.

Foreign funds were the big seller of Malaysian stocks today. Data provided by Bursa Malaysia revealed that foreign funds sold RM1.08 billion worth of stocks today, and bought only RM470.06 million worth of stocks -- making them a net seller of RM611.39 million.

Ringgit is also weakening against the US dollar -- from RM3.10 (per dollar) early this week to RM3.13 today.

Markets across the region were not spared.

Japan stocks were among the biggest casualties, as the TOPIX and Nikkei 225 indices fell 4.78 per cent and 6.35 per cent to 1,044.17 and 12,445.38, respectively.

Elsewhere, Hong Kong's Hang Seng Index, Shanghai Stock Exchange Composite Index, Korea's KPOSI, Singapore's STI, Thailand's SET index, Jakarta Stock Exchange Composite Index suffered a 2.19 per cent, 2.74 per cent, 1.42 per cent, 0.72 per cent, 2.11 per cent and 1.92 per cent, respectively.

Philippines' benchmark index is the biggest loser in the Southeast Asia, as it suffered a 6.75 per cent fall today.

“Investors are concerned over the possibilities of the Federal Reserves tapering. This has prompted investors to exit Asian markets, especially the emerging markets," Mercury Securities head of research Edmund Tham told Astro AWANI.

The World Bank today reduced its growth forecast for the world economy to 2.2 per cent, against its earlier estimate of 2.4 per cent.

Meanwhile, Morgan Stanley also cuts its 2013 projection for China's growth to 7.6 per cent, from the earlier projection of 8.2 per cent.

Analysts were mixed on the near-term outlook of the Malaysian stocks -- whether or not it will enter into a bear market.

"Most of the regional market s have corrected over the recent days and weeks, leaving Malaysia as one of the 'least corrected" markets. So, there are fears that we could be next," said another research head when contacted.

However, Tham remained positive and believed that Malaysian market is "more defensive" in nature and said that it is too early to say that it will enter into a bear market.