Updated from 12:43 a.m. EDT

Asian stocks closed markedly lower Friday, with Japan's Nikkei 225 stock average falling to its lowest level in five years, stocks in Europe were plummeting and U.S. shares look set to open to the downside as the worsening global credit crisis pushes investors to sell.

The Nikkei closed down 881.06 points, or 9.6%, to 8276.43, its lowest level since May 2003. The loss was its biggest one-day percentage loss since the stock market crash of October 1987. The index has fallen 24% since the start of the week. The Nikkei at one point fell more than 11% during the trading session.

The Japanese market was stung by the failure of an insurance company and a real-estate investment trust. Insurer

Yamato Life Insurance

went bankrupt Friday, the nation's first bankruptcy in the industry in seven years, according to

Bloomberg

. On Thursday, real-estate investment trust

New City Investment

filed for bankruptcy.

The yen rose, hitting a three-year high vs. the euro. Crude oil fell almost $4 a barrel to $82.77 a barrel in electronic trading on the

New York Mercantile Exchange

.

All markets in Asia closed lower. The Hang Seng index fell almost 8%, while the S&P/ASX index in Australia fell 8.3%.

Stocks in Europe were mirroring the Asia markets as losses piled up. The FTSE 100 index in London fell 4.9%, and the DAX in Frankfurt was off 7.2%. Stocks of financial firms, mining companies and utilities were falling.

U.S. stocks look set to open down Friday as

S&P 500

futures fell 19.80 points to 892.70, and were 20.99 points below fair value.

Nasdaq

futures fell 7.25 points to 1264.75, and were 20.71 points below fair value.

On Thursday in the U.S., tight credit markets and pessimism regarding the financial sector walloped the major indices and sent the

Dow Jones Industrial Average

below the 9000 mark for the first time in five years.

The bears emerged in force at the final hour of trading. The Dow, which earlier had risen as much as 190 points, ended down 678.91 points, or 7.3%, at 8579.19. The

S&P 500

sank 75.02, or 7.6%, to 909.92, and the

Nasdaq

lost 95.21 points, or 5.5%, at 1645.12.

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