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HONG KONG: Asian stock markets on Friday caught a global selling fever after new warnings of world recession coupled with fears that rapid-fire growth in China is set to slow down.
Investors in Tokyo, Seoul and Sydney picked up on the mounting anxiety evident in the United States and Europe, where fresh carnage ripped across the markets on Thursday.
"The bears returned aggressively overnight as very disappointing US economic data and fears over the stability of European banks had traders reaching for the sell button," IG Markets analyst Ben Potter said in Australia.
"It looks like we're set for a very ugly end to the week as fear and panic-driven trade once again dominate the market," he said.
"We could have the added pressure of traders looking to close their positions ahead of the weekend given the high levels of uncertainty."
About an hour after opening, Japan's Nikkei share index had lost 2.17 per cent to 8,750.02 with banking and financial shares particularly in the firing line.
Australia's benchmark S&P/ASX 200 was down 2.55 per cent at 4,142.60. Hong Kong dived 2.71 per cent to 19,473.38 while Singapore's headline share index fell 2.55 per cent to 2,752.94 in opening trades.
In Seoul, the benchmark KOSPI was down a hefty 3.87 per cent at 1,788.59 with South Korean exporters such as Samsung Electronics and Hyundai Motor hit hard.
In Singapore, shares opened 2.5 per cent lower.
Chinese shares opened down around 1.6 per cent, tracking the sharp losses in overseas markets on fears of weakness in the economies of the United States and Europe, dealers said.
The Shanghai Composite Index was down 39.82 points to 2,519.65.
The worldwide selloff came after Wall Street investment bank Morgan Stanley warned that the US and eurozone economies were "dangerously close" to a double-dip recession.
Stocks were further punished by a fresh round of gloomy economic data from the United States such as jobless claims, and growing doubts about the ability of European banks to withstand the 17-nation eurozone's debt crisis.
The Dow Jones Industrial Average was down 3.7 per cent at the closing bell, while the broader S&P 500 slumped 4.5 per cent and the tech-heavy Nasdaq Composite plummeted 5.2 per cent.
Losses were even worse in Europe on Thursday, as London stocks closed down 4.5 per cent, Paris fell 5.5 per cent and Frankfurt dropped 5.8 per cent.
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