World stock markets plunged on Friday amid a massive sell-off of stocks and escalating fears about a global recession.

Japan's benchmark Nikkei 225 index tumbled 881.06 points, or 9.6 per cent, on Friday to 8,276.43, its lowest closing level since May 2003.

Kenji Akasaka, 69, president of a Tokyo printing company, told the Associated Press he had never seen it this bad in the 40 years he has traded stocks.

Akasaka said he invests mainly in blue chips that include Toyota Motor Corp. and Nintendo Co. Both have lost about half their value over the last year.

"I pray before I go to bed that the Dow will recover," Akasaka said. "I get sleepless, thinking about losses."

Japanese Economy Minister Kaoru Yosano sought to reassure the country even as markets tumbled.

"We need to make sure that we don't get pulled too much by global tides," Yosano said. "I hope investors [in Japan make] decisions calmly based on Japan's economic fundamentals."

The Bank of Japan injected $45.2 billion US into the Tokyo money market Friday in its 18th straight business day of emergency liquidity operations.

Markets in Hong Kong, Australia, South Korea, Thailand and the Philippines were also all down more than seven per cent, while Shanghai's index was down 3.8 per cent.

Several of the central banks in the United States, Canada, Europe and Asia slashed interest rates earlier in the week in an effort to boost investor confidence and resuscitate lending, but the move has done little to help rectify the global financial crisis yet.

'Selling is unstoppable'

"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo. "Investors were gripped by fear."

Finance ministers and central bankers from the Group of Seven industrialized nations will be meeting in Washington on Friday.

Analysts in Asia told the Associated Press they were skeptical the gathering would produce solutions to effectively contain the global financial crisis.

"There's no bottom to the stock markets now," said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. "There's no clue when it will stop."

In Indonesia, authorities have suspended trading indefinitely on the Jakarta Stock Exchange after the index plunged more than 10 per cent on Wednesday.

Regulators in Russia have also ordered Moscow's MICEX not to open for regular trading and the opening of the RTS was postponed until further notice.

European markets down

Major markets in Europe were also plunging as they opened on Friday.

At mid-morning London time, the FTSE 100 index of leading British shares was down 233.84, or 5.4 per cent, at 4,079.96, having fallen below the 4,000 mark earlier for the first time in five years.

Germany's DAX was 383.70, or 7.9 per cent, at 4,503.30, and France's CAC-40 was 209.67, or 6.1 per cent lower at 3,233.03.

In Vienna, the stock exchange has been suspended until midday after stocks tumbled 10 per cent at the opening bell.

"Overall it's the fact that despite the huge fire-fighting efforts of central banks worldwide we still haven't seen any thawing of inter-bank lending that is going to be causing the most concern now," said Matt Buckland, a dealer at CMC Markets in London.

In Brazil, the Ibovespa, the country's main stock index, also plummeted more than 10 per cent, to 33,303, in early trading on Friday. The indexes in Mexico and Chile also dropped.

The global regional sell-offs are following a 7.3 per cent plunge in the Dow Jones industrial average Thursday, when it closed below the 9,000 line for the first time in five years.

In Toronto the TSX composite index closed down 456 points at 9,600, a 4.5 per cent decline.

The North American markets fell again at opening Friday morning.

Grace Cerdenia, managing director of 2tradeasia.com in Manila, said the growing global sell-off is pressuring local clients to "sell even at a loss."

David Wyss, chief economist at Standard & Poor's in New York, said: "Right now the market is just panicked. Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."

With files from the Associated Press