MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.7 percent to the lowest level since June 2012, and was on track for a loss of 3.2 percent for the week.
Japan's Nikkei also reversed earlier advances to close down 0.5 percent, extending losses for the week to 3.1 percent.
European markets were also set for indecisive trading, with financial spreadbetters' predictions ranging from gains of as much as 0.3 percent to losses of 0.2 percent at the open for Britain's FTSE 100, Germany's DAX and France's CAC 40.
Oil prices rebounded on Thursday, with international benchmark Brent futures rising 2.4 percent to $31.03 a barrel, recovering from its 12-year low of $29.73 hit earlier in the day.
But that rally, largely driven by short-covering after a 20 percent fall since the start of year, proved to be shortlived. The collapse in oil prices has spooked financial markets as investors worried about the health of the global economy, with a slowdown in China and volatility in its markets making for a nervous start to the year.
"Market sentiment was cautious to begin with, as overnight gains in US equities were complicated by losses by European indices," said Bernard Aw, market strategist at IG in Singapore. "Furthermore, oil prices were under pressure once again, constraining any relief rally in energy and material stocks."
Brent crude opened weaker on Friday and lost 1.4 percent to $30.38, heading for a 9.4 percent loss for the week.
U.S. crude fared even worse, slumping 2.6 percent to $30.39, and set for a weekly decline of 8.5 percent, as the prospect of additional Iranian supply looms over the market. It had posted the first significant gains for 2016 in the previous session.
Stocks in China also returned to negative territory after a brief rebound in late trading on Thursday.
The bounce - which saw the Shanghai Composite index reverse an earlier fall to a 4 1/2 month low to end 2 percent higher - raised suspicions among dealers that a "National Team" of investors, who participated in a rescue when markets plunged in August, had been behind the move again.
Chinese shares extended earlier losses on Friday after data showed new yuan loans in December were well below the previous month's lending, and broad M2 money supply growth also slowed, with both missing expectations.
The Shanghai Composite lost 3.4 percent, while the CSI300 tumbled 3.1 percent. That put the former on track for a 8.8 percent loss for the week, and latter for a decline of 7 percent.
Worries that a depreciating yuan could spark competitive currency devaluation across the region have also hit global shares this month.
On Friday, the Chinese yuan, posted modest gains. That put the yuan 0.1 percent up on the week, but it was still around 1.4 percent weaker against the dollar than it started the year and has lost nearly 5 percent since August.
The People's Bank of China set a marginally weaker midpoint of 6.5637. The spot market opened at 6.5920 per dollar and was changing hands at 6.5870 at 0635 GMT, 20 pips firmer than the previous close.
"There are some hopes that a series of Chinese economic data due early next week will give investors relief," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
"Traditionally Chinese shares perform relatively well around the time of lunar new year and Shanghai shares also appear to be supported around the 3,000 mark even as they briefly fell below that level yesterday," he added.
China will publish a host of data on Monday and Tuesday, including December quarter gross domestic product.
The rebound in oil prices on Thursday helped to lift U.S. shares from three-month lows, although that came on the heels of a 1.5 percent loss in the broader European FTSEurofirst 300 .
The S&P 500 gained 1.7 percent, led by a 4.5 percent rise in the energy sector.
U.S. retail sales data due later on Friday will be on investors' radar as they try to gauge the likelihood of the Federal Reserve raising rates in March.
In the currency market, the yen advanced after earlier losses on a resumption of demand for the safe haven currency.
The dollar slipped 0.3 percent to 117.72 yen, but remained solidly above a 4 1/2-month low of 116.70 yen hit on Monday.
The euro advanced 0.2 percent, fetching $1.0883. That pushed the dollar index . down 0.1 percent to 98.990.
The European Central Bank said it saw scope for further cuts in its deposit rate in minutes of its December meeting, but many ECB policymakers appeared sceptical about the need for further action in the near term.
Commodity-linked currencies also gave up earlier gains, with the Australian dollar slipping 0.7 percent to $0.6937, up from Thursday's four-month low of $0.6910. - Reuters
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