Japanese stock market trader Japanese shares felt the force of the economic uncertaintyFears about a global economic slowdown, heightened by worsening US job figures, have continued to undermine stock markets around the world.
London's FTSE 100 index lost 2.3% - taking its weekly decline to 7% - its biggest since July 2002.
Markets in Paris and Frankfurt fell by 2.5% as economy concerns spread.
On Wall Street the Dow Jones index clawed back early losses to edge higher despite figures showing the US economy shed 84,000 jobs last month.
But the benchmark US index still had its worst week since May.
Earlier, Japan's main share index fell nearly 3% while markets in Hong Kong, China, Australia and India all slid 2%.
'Ugly' data
The US labour market figures - which showed the unemployment rate rising to 6.1% - were a further jolt to investors who have had to swallow a slew of poor economic data in recent days.
Economists had been expecting 75,000 jobs to be lost while the government also revised upwards.
"This was an ugly number that pretty much confirms that our economy continues to trend downward," said Jack Ablin, chief investment officer of Harris Private Bank.
"This just knocks the legs out of any hope of seeing much economic improvement right now."
'Uncertainty'
The FTSE 100 closed down 2.3% at 5,240.70 points. The last time it lost so much value in a week was more than six years ago in the wake of financial scandals such as Enron and WorldCom.
Markets in Paris and Frankfurt continued their recent downward trend, both the Cac-40 index and the Dax-30 dropping about 2.5%.
The Dow Jones index, which lost 3% on Thursday, rose 32.73 points, or 0.3% to 11,220.96, but still ended down 2.8% on the week.
"Given the fact we were down so much yesterday we're seeing a bit of a reflex rally with investors wanting to take advantages of some of the bargains," said Bucky Hellwig, senior vice president at Morgan Asset Management.
The Nasdaq index slipped 3.16 points, or 0.1% to 2,255.88, ending the week 4.7% lower.
Earlier Japan's benchmark Nikkei index fell 361.54 points to 12,196.12 amid a widespread sell-off of shares in Asia.
The Hang Seng index fell more than 3% in Hong Kong while markets also fell sharply in China, Australia and India.
"Amid the uncertainty, few investors are willing to buy," said Masayuki, Otani, chief market analyst at Securities Japan.
"Several bad things happened at once," he added, explaining the fall.
Gloom
Worries about inflation have prevented central banks in Europe from cutting interest rates to help forestall a slowdown.
But analysts believe this could change soon with economic forecasts across Europe looking increasingly gloomy.
The European Central Bank cut its 2009 growth forecast from 1.5% to 1.2% on Thursday while the UK economy stalled in the second quarter.
In a separate development, the Russian rouble fell against the dollar a day after Russia's central bank intervened to support the currency amid concerns about a flight of foreign capital after the conflict with Georgia.
The central bank sold up to $4bn in reserves, the Financial Times reported, after the rouble slipped to its lowest level since February 2007.
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