Singapore - Asian shares fell on Friday and the safe-haven dollar stayed near its highest in a week-and-a-half as fears about global growth rose in the wake of weak manufacturing data from the United States, Europe and China.
A long-expected downgrade to the credit ratings of 15 of the world's biggest banks by ratings agency Moody's added to the gloom, which also weighed on commodities and currencies such as the Australian dollar that are linked to resource demand.
"If you give me $1m, I won't put more than half of that into the market right now, and even what I do put in will be for the short term," said Larry Jiang, chief strategist at Guotai Junan International Securities in Hong Kong.
"The US is clearly not in as good a shape as people thought even a month ago. We still don't know if China has found a bottom and there's Europe," he added.
European markets were expected to follow Asia's downbeat lead, with spreadbetters calling the main indexes in London , Paris and Frankfurt to open down around 0.9%.
MSCI's broadest index of Asia Pacific shares outside Japan fell 1.5%, dropping into negative territory for the week, and Tokyo's Nikkei share average lost 0.2%.
Analysts at Citi said Asian stock markets outside Japan had suffered $1bn in redemptions in the seven-day period that ended on Wednesday, the biggest factor in a net outflow of $243m from global emerging market equity funds.
US stocks fell around 2% on Thursday, racking up Wall Street's worst loss in three weeks, after a survey showed US factory growth at its slowest in 11 months in June.
That followed data showing the eurozone's private sector shrank at its fastest pace in three years this month, while Chinese manufacturing contracted for an eighth straight month.
Losses on Wall Street worsened after a bearish call from Goldman Sachs, which advised clients to bet on further falls in the broad S&P 500 index on expectations of more weakness in the economy.
"We are recommending a short position in the S&P 500 index with a target of 1,285," (roughly 5% below current levels), Goldman said in a note.
S&P 500 index futures traded in Asia were up 0.2% on Friday, pointing to a slight rebound when the market resumes trading.
The darkening outlook for the world economy has sparked a sharp sell-off in commodities this week, with Brent crude oil falling below $90 a barrel for the first time in 18 months.
Brent crude rebounded 0.6% to $89.78 a barrel on Friday, but remained down 8% on the week.
"Manufacturing is a key indicator of oil demand, and based on the data coming out of the United States it doesn't look good, even though prices have been coming off," said Ben Le Brun, a Sydney-based market analyst at OptionsXpress.
Copper eased 0.5%, after tumbling in the previous session, to trade just above $7 300 a tonne, on course for its seventh weekly loss in the past eight weeks.
The dollar was steady against a basket of major currencies , after gaining nearly 1% on Thursday in its biggest rally in more than three months.
"Investors sought shelter in safe haven assets after the Moody's downgrade, which reminded them that the eurozone problems have morphed into a very serious global crisis," said a senior spot trader at a major Japanese bank based in Tokyo.
The euro was traded around $1.2553, up 0.1% on the day but well off the week's peak of $1.2748 scaled on Monday. The Australian dollar bought $1.005, having dropped more than 1.3% from Thursday's high of $1.0205.
Gold slipped 0.1% to around $1 565 an ounce, after falling 2.5% on Thursday to wipe out almost all its 2012 gains as worries over the global economy robbed the precious metal of its inflation-hedge appeal.