Asian stocks tumble, Europe opens mixed after fresh recession fears hit Wall Street

Fears of a double-dip U.S. recession and worries over the value of European bank assets drove Asian markets sharply lower Friday, after fresh carnage on Wall Street overnight.

Falls of 4.5 percent in New York and London flowed into Asian markets, with Tokyo losing 2.51 percent, Seoul 6.2 percent, Hong Kong 2.6 percent and Sydney 3.51 percent. European markets opened mixed.

"Markets have been quite volatile given prevailing concerns about Europe’s debt crisis and slowing U.S. economy," Hong Kong-based fund manager Michiya Tomita told Bloomberg.

"The U.S. still needs government stimulus as it will take time before the economy fully recovers."

Despite the selling, some analysts said the damage could have been worse.

Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, told The Financial Times:

To some degree the markets in Asia are becoming a bit more resilient to the falls in Europe and the U.S. Even though Asia is vulnerable to a return to recession in the U.S. and Europe, the fundamentals are far stronger and there is scope for monetary easing if need be. I think investors are starting to allow for that.

AFP reported investors hit the sell button after investment bank Morgan Stanley warned that the U.S. and eurozone economies were "dangerously close" to slipping back into recession.

In Europe, London opened 0.2 percent in positive territory but Frankfurt and Paris both dropped 0.4 percent.

Michael Hewson of CMC Markets told The Wall Street Journal:

The realization amongst investors is slowly dawning that the various toolboxes that policy makers have at their disposal are starting to look a little threadbare. In short, the bullets are running out.