Asian markets have slipped sharply this morning, following US markets overnight tumble that reflected rising worries over spiraling inflation. Japan's Nikkei 225 Stock Average slipped 2.22% to 13,515.12, while Hang Seng index dropped 2.2%.

The US Dow Jones industrial average fell to a 21-month low on back of record rise in crude oil prices. Sentiments were further dampened after Goldman Sachs' reports showed a gloomy pictures for the financial sector. 

In Europe, heavyweights fell to their lowest close since late March, driven by a sharp turn down in global financial shares. Banking stocks were badly battered turning out to be the worst performers on the FTSE 100 index. HSBC, Standard Chartered and Royal Bank of Scotland all fell between 4 to 7%.

The FTSE 100 closed at 5,518.2 losing 147.90 points or 2.61%, making this its lowest close since March 20, 2008, and its biggest one-day fall in over a month.

Even the Australian stocks slumped in early trading Friday following a sharp cut on Wall Street. Banking stocks were hit the hardest. Mining giants BHP Billiton and Rio Tinto fell about 3% each. The S&P/ASX 200 index fell 82 points or 1.55% to close at 5,225.

Crude oil prices hit a record high of US$140.39 in a rally after OPEC president in a comment said that prices could rise as high as $170/bbl in the coming months. A weaker dollar also helped fuel the rally.