Asian stock markets have slumped on Friday, extending a global equity sell-off after Wall Street had its worst day in more than two years.

Japan's main index fell 3.7%, South Korea's also lost 3.7%, Australia's dipped 4% and Hong Kong's shed 4.6%.

European markets continued the sell-off, with the UK's benchmark FTSE 100 index and Germany's Dax index both down by about 2.5% in early trade.

Analysts warned that global markets could remain volatile in coming weeks.

"Fear is the major theme," David Cohen of Action Economics told the BBC.

"People were cautiously optimistic that we would get back on track in the second half of the year. But with the US recovery stalling and the possible repercussions for the global economy, stock markets have been under pressure for a while."

The sell-off in global equities in recent days has hit investors hard.

Over the past nine trading sessions, the US S&P 500 stock index has lost $1.37tn (£843.6bn) from its total market value.

In Europe, the UK's FTSE has seen £160.9bn ($261bn) wiped off its market value. In Germany, the Dax has shed 85.5bn euros (£74.2bn; $120.5bn), with France's Cac losing 13.6bn euros.

Falls across sectors

Early trading in Asia on Friday saw a broad sell-off of equities from across industries.

Carmakers and manufacturers, which get a large chunk of their revenue from exports to the US and Europe, led declines with Sony shedding 4.9% and Toyota down 3.8%.

Commodity firms were also under pressure and helped push China's Shanghai Composite Index 2.3% lower. The biggest producers of copper and aluminium, Jiangxi Copper and Aluminum Corporation of China, fell more than 3%.

In Australia, the world's biggest mining company BHP Billiton slid 4%, while rival Rio Tinto dropped more than 5%.

Banks and real estate firms did not escape the negative mood, with HSBC down more than 4% in Hong Kong, and Industrial & Commercial Bank of China and China Vanke both down some 3%.

The price of oil also dropped in New York. US light crude for September delivery fell 1% to $85.75 a barrel, extending Thursday's 6% tumble.

Even gold prices fell, bucking a trend that had seen investors flock to the metal, viewing it as a less risky asset and helping push prices to record levels.

Gold dropped $3.71 an ounce to $1,644.19 on Friday, after setting a new record of $1,681 an ounce on Thursday.

"Losses today have been indiscriminate," Ben Potter from IG Markets said in a report. "The big question on everyone's mind is: what will happen across European and US markets tonight and will there be any form of emergency policy response?"

'Out of tools'

Throughout 2011, global markets have been trying to absorb and process a number of significant shocks.

The first half of the year saw a deadly earthquake and tsunami strike Japan, hurting the world's third-biggest economy just as it looked as if growth was picking up.

At the same time, there was a spike in oil prices caused by the political unrest in North Africa and the Middle East. Bubbling away in the background the whole time were the growing debt problems in the US and the eurozone.

Image caption The biggest problem facing investors is that they are running out of places to put their money

However, despite these issues, analysts say many investors were optimistic that underlying global growth would be helped along by expansion in China and Asia's other fast-growing nations.

That optimism seems to have dissipated in recent weeks as policymakers' failure to deal with the global fiscal problems was compounded by some weak economic data out of the US.

Investors are now cautiously watching the outcome of US jobs data due out on Friday as an indicator of the strength of the economy.

Also, the efforts of governments and central banks to instil stability into the markets seem to have fallen short of their goal.

On Thursday, in a move that many analysts called a short-term fix, Japan intervened in the currency market in an attempt to weaken the strong yen and buy some succour for exporters.

Action Economics' Mr Cohen said people were losing hope that lawmakers would be able to get growth back on track.

"There is an underlying fear that central banks don't have any more tools," he said.

Spreading problem

On Thursday in the US, the Dow Jones index had its worst day since December 2008, closing down 512.76 points, or 4.3%, at 11,383.68.

Wall Street's other leading indexes also slid, with the S&P 500 index falling 4.8% and the tech-heavy Nasdaq more than 5% lower.

Earlier in the day, Europe had been been under heavy selling pressure, with its main indexes losing more than 3%.

This came after European Commission President Jose Manuel Barroso warned that the region's sovereign debt crisis was spreading, sparking fears that Italy and Spain might become engulfed in the problems.

London's FTSE 100 index and Frankfurt's Dax had their worst day this year on Thursday, closing almost 3.5% lower.

"People are throwing in the towel because they can't find relief on any front," said Milton Ezrati, market strategist at Lord Abbett.