Asia Suffers Selloff, Tokyo and Seoul Shed 2%

Asia experienced a selloff across the board, led by Shanghai's 5 percent tumble, after shares plunged on Wall Street and oil prices shot above $140 a barrel, fanning investors' fears of high inflation and slowing economic growth. Japan and South Korea finished 2 percent lower.

Goldman Sachs was one of the triggers for negative sentiment after the brokerage forecast more credit-related write-downs at Citigroup and Merrill Lynch and urged investors to sell struggling automaker General Motors .

The U.S. dollar hovered near three-week lows against the euro on fresh signs of weakness in the world's largest economy, pushing up gold prices to the highest in a month.

Oil futures shot above $140 in New York trade overnight after OPEC's president said oil prices could rise well above $150 a barrel this year and Libya said it may cut oil production. Crude oil is currently trading around the $139 level in the Asian session.  Crude has surged 45 percent so far this year, raising costs for businesses, consumers and governments and confounding central banks that are struggling to balance rising global inflation with economic sluggishness.

The surge in oil prices lifted energy counters. , Australia's Santos and South Korea's SK Energy closed sharply higher.

Japan's Nikkei 225 Average slid 2 percent to a two-month closing low in its longest losing streak in seven months, with Sony and other exporters battered by high oil prices, sharp Wall Street losses and growing uncertainty over the U.S. economy.

Seoul shares tumbled nearly 2 percent led by exporters such as Samsung Electronics after record oil prices and rekindled worries about the global credit crunchsent Wall Street shares sharply tumbling on Thursday, dampening sentiment towards Seoul shares.

Australian shares ended down 1.3 percent, off three-month lows, after infrastructure stocks and a few big banks staged an afternoon fightback.  Gold miner Newcrest Mining surged, gaining over 11 percent as worried investors sought refuge in commodities such as gold.

Hong Kong shares fell 1.8 percent to their lowest level in three months, as investors fretted over the prospect of lower earnings at big U.S. companies and record high oil prices. HSBC Holdings, Europe's biggest bank, led losses with a 1.6 percent

China's Shanghai Composite Index plummeted 5.3 percent in response to the weakness of the U.S. market, high oil prices and concern about the Shanghai market's ability to absorb supplies of new shares from IPOs.

Singapore's Straits Times Index was down 0.8 percent with blue chips declining sharply across the board.

© 2008 CNBC.com