A man walks in front of the electronic stock board of a securities firm in Tokyo on Nov. 27. The benchmark Nikkei 225 stock average fell 301.72 points, or 3.2 per cent, to 9,081.52. (AP Photo/Itsuo Inouye) (Itsuo Inouye/Associated Press)

Asian stock markets tumbled Friday, with Hong Kong and South Korea down nearly five per cent, as fears mounted over the fallout from Dubai's massive debt problems. European stocks extended their slide.

It was Asia's second day of losses and followed a rout in European markets Thursday. Oil, meanwhile, dived below $74 US a barrel and the U.S. dollar hit a fresh 14-year low against the yen. U.S. stocks futures pointed to a rough session on Wall Street when trade resumes Friday following a holiday.

Nasdaq futures were off 49.75 points, or 2.8 per cent, at 1,744.50 and Dow futures fell 242, or 2.3 per cent, to 10,200. S&P futures dropped 30.8, or 2.8 per cent, to 1,078.00.

Investors cut back their riskier bets on equities and commodities after Dubai World, the emirate's main development engine, announced it was asking creditors to delay paying back its $60 billion US debt.

The news triggered fears of a massive default and a wave of heavy losses at banks and companies exposed to its debt that could cause more financial pain just as the global economy is starting to recover.

Also dampening the mood was the slumping U.S. dollar, which weakened to a new 14-year low below 85 yen, dragging down shares of Japanese exporters like automaker Nissan and electronics maker Sharp.

"Investors were searching for shelter against the increased volatility and falls in risky assets," Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong, said in a note. "Many chose to opt for the Japanese yen."

As trading got underway in Europe, Britain's FTSE 100 was off 0.5 per cent, Germany's DAX lost 0.4 per cent and France's CAC-40 shed 0.3 per cent.

Earlier in Asia, Japan's Nikkei 225 stock average fell 301.72 points, or 3.2 per cent, to 9,081.52. Hong Kong's main index dived 1,075.91, or 4.8 per cent, to 21,134.50.

Elsewhere, South Korea's Kospi benchmark plummeted 4.7 per cent to 1,524.50 and Australia's index dropped 2.9 per cent. China's main Shanghai stock measure was off 2.4 per cent.

Certain banks got hit especially hard amid jitters about any losses they might suffer from their exposure to Dubai World. In Hong Kong trade, HSBC tanked 6.1 per cent and Standard Chartered fell 5.8 per cent; both British-based banks have substantial Middle East operations.

Oil prices nosedived in Asian trade, with benchmark crude for January delivery falling $4.23 to $73.77 US a barrel.

The U.S. dollar was lower at 86.35 yen from 86.54 yen after swooning as low as 84.81. The euro fell to $1.4862 from $1.5021.