Asian stocks fell for a third straight day and oil prices slipped to a 1-1/2-year low below $60 a barrel on Friday in the face of a rapidly slowing global economy, though aggressive policy changes brought markets back from freefall.
Still, no industry was considered a safe bet and investors found few havens except for the yen and some government bonds, with the financial crisis expected to see the world's developed economies headed for the first full-year contraction since World War II.
Toyota Motor Corp saw its stock slump 12 percent after the world's top car maker cut in half its net profit forecast for fiscal year 2008 because of dwindling demand.
Central banks met limited success as they scrambled to get ahead of deteriorating conditions. The Bank of Korea cut interest rates for the third time in a month, following half-point cuts on Thursday from the European Central Bank and the Swiss National Bank.
The Bank of England spooked investors by slashing its key rate by 1.5 percentage points, much more than the market expected, bringing borrowing costs down to the lowest since the 1950s.
"The dramatic moves by the central banks shows that the depth of the economic problems in the global economy and the implications of economic contraction on the inflation outlook is now being recognised fully by policymakers," Ashley Davies, currency strategist with UBS in Singapore, said in a note.
Nikkei leads lower
Japan's Nikkei share average led the region lower, dropping 4.4 per cent. For a second day, exporters with good overseas brand recognition, like Canon Inc and Honda Motor Co, were clobbered.
The MSCI index of Asia-Pacific stocks excluding Japan fell 2.7 per cent and was heading for another weekly loss. The index has posted a weekly rise just four times in almost six months and has lost about 55 percent this year in what is shaping up to be the worst bear market the region has ever experienced.
South Korean stocks fought back from early losses, edging up 0.8 per cent, after the central bank rate cut boosted bank stocks.
Hong Kong's Hang Seng index fell 1.3 per cent in volatile trade, with Hong Kong Exchanges & Clearing stock one of the biggest drags because of grim expectations the company's quarterly results next week will reflect poor market conditions.
US stocks overnight posted their worst two-day slide since October 1987, though S&P 500 futures ticked higher as investors awaited the latest US payroll report due on Friday.
A reason for cheer?
The median forecast of economists polled by Reuters last week has payrolls losses of 200,000 in October, though Goldman Sachs this week increased its expectation for job losses to 300,000.
The sharp decline in global equity markets has pushed up the yen, which has benefited from a combination of Japanese investors closing out overseas trades and bringing money back home as well as global investors finding comfort in Japan's external surplus.
"The yen tends to attract buying because of the weakness in economies around the world," said Takahide Nagasaki, chief foreign exchange strategist for Daiwa Securities SMBC in Tokyo.
Unless the global economy improves, it is hard to expect investors to actively sell the low-yielding yen to invest elsewhere, Nagasaki said.
The euro fell 0.4 per cent against the yen from late US trading on Thursday to 123.75 yen but rose 0.1 per cent against the dollar to $1.2730.
The US dollar fell 0.5 per cent against the yen to 97.30 yen.
The feverish reduction of risk in investors' portfolios and on bank balance sheets, a process broadly described as deleveraging, has been the main factor driving down global equities, emerging market asset prices and commodities.
Commodity prices remained under pressure, with Shanghai copper futures tumbling by their 5 per cent daily limit after sharp falls in London copper prices overnight.
The December US crude oil futures contract meanwhile was largely unchanged at $61.06 a barrel after earlier hitting after hitting a low of $59.97 on concerns about the global slowdown hitting demand.
Analysts with State Street Global Markets said institutional investors have been extremely risk averse for five straight months, according to data derived from 15 percent of the world's tradeable assets.
However, with borrowing rates between banks falling, inflation rates mostly coming down and liquidity conditions among emerging markets improving, State Street found a silver lining.
"For the first time since the credit crunch bit there is a chance that the authorities are getting ahead of events. This is one reason to be cheerful," they said in a note.