HONG KONG - ASIAN stocks continued to sag on Friday, sending Tokyo's index to its eighth straight loss, as uncertainty about company earnings weighed on expectations of a faster turnaround in the world economy. European markets opened lower.

The back-and-forth trade in Asia wrapped up a lackluster week that saw the region's major benchmarks pull back amid concerns the recent rally had overestimated the speed and scale of any rebound in global growth. Oil prices fell below US$60 (S$87) a barrel.

Investors were less than encouraged by the tepid gains on Wall Street, where stocks inched up following aluminum maker Alcoa Inc's narrower-than-expected second quarter loss of nearly half a billion dollars. Weak sales reports from US retailers and more pain in the country's labor market did little to lift the mood.

The markets cratered after last week's troubling signs of growing job losses in the US and Europe led investors to reassess the recovery story that drove a number of markets 30 percent higher or more between March and June.

Now, analysts say there seems to be a lack of direction - evidenced by lower volumes and volatility in recent days - as many investors await more company results for clues about the economy's prospects or take a break during the summer months.

As trading got underway in Europe, Britain's FTSE 100 lost 0.3 per cent, Germany's DAX was down 0.1 per cent and France's CAC 40 dropped 0.3 per cent. US stock futures were lower suggesting more losses on Friday on Wall Street. Dow futures were down 30, or 0.4 per cent, at 8,104 and S&P futures fell 2.3, or 0.3 per cent, to 876.70.

Markets in Asia gyrated throughout the day before edging down in the afternoon.

In Tokyo, the Nikkei closed off slightly, losing 3.78 points, or 0.04 per cent, to 9,287.28. The benchmark last ended higher on Tuesday, June 30.

The weak trading in Japan came as its central bank said wholesale prices fell 6.6 per cent in June from a year earlier - the biggest fall on record and the latest evidence that deflation is returning to the world's second-biggest economy.

Elsewhere, Hong Kong's Hang Seng fell 82.17, or 0.5 per cent, to 17,708.42. South Korea's Kospi fell 0.2 per cent and Shanghai's index shed 0.3 per cent. -- AP.