By Shri Navaratnam, Philip Vahn & Lisa Twaronite TOKYO (MarketWatch) - Asian shares were down Friday, but many markets were off their lows as some investors picked up shares battered by continuing fears about Europe's debt crisis. Property stocks in China and banking plays in Australia recovered, although weak sentiment continued to weigh on some technology shares in Tokyo and Taipei. Sentiment was hit after the Dow Jones Industrial Average fell 3.6% on Thursday, its largest percentage drop since March 5, 2009, due to worries about the potential impact of the euro zone debt crisis on global growth. "Over the medium to long term, the authorities' bold policy response should eventually improve expectations of Europe's public finance, global sentiment and growth expectations," Tomoko Fujii, strategist at Bank of America Securities-Merrill Lynch, said. "However, markets appear to be concluding that, before reaching that stage, we probably have to undergo more bad news with negative implications on global growth expectations," she said. Japan's Nikkei Stock Average ended down 2.5% at a fresh 2010 low of 9784.54, but was off an earlier fall of more than 3%. The broader Topix index slumped 2.1%, to 879.69. Australia's S&P/ASX 200 was 0.3% lower, but pared a morning loss of around 3.2% to a 10-month low. Taiwan's main index was down 2.5%, and China's Shanghai Composite Index reversed earlier losses and turned 1.1% higher, with Xinjiang-based companies leading the rise following the announcement of a massive stimulus package for the region. Dow Jones Industrial Average futures were 23 points higher in screen trade. Hong Kong and South Korean markets were closed for a public holiday. Markets in Thailand were also closed due to recent political unrest. Australian shares recouped some losses, after the S&P/ASX 200 slid to 4,175.7 at one point. Major blue chips came under pressure after U.S. senators passed an ambitious overhaul of U.S. financial markets, channeling broad outrage at Wall Street into a measure that could force major changes at the nation's financial firms. In the resource shares, BHP Billiton Ltd. (AU:BHP 36.77, +0.02, +0.05%) (BHP 59.10, -3.92, -6.22%) erased losses and ended up 0.1%, while Rio Tinto Ltd. (AU:RIO 61.80, -0.45, -0.72%) (RTP 39.87, -3.81, -8.72%) pared losses and ended down 0.7%. Energy stocks were also hurt by Thursday's drop in crude oil prices, with Woodside Petroleum Ltd. (AU:WPL 41.38, -0.21, -0.51%) (WOPEY 32.93, -2.58, -7.27%) down 0.5%. However, bargain-hunting lifted the market more than 80 points from its low as banks reversed their losses with Westpac Banking Corp. (AU:WBC 22.28, +0.48, +2.20%) (WBK 88.26, -8.58, -8.86%) up 2.2%, ANZ Bank (AU:ANZ 21.00, +0.37, +1.79%) (ANZBY 16.41, -1.49, -8.32%) 1.8% higher and Commonwealth Bank of Australia (AU:CBA 50.94, +0.87, +1.74%) (CBAUF 42.05, -3.45, -7.58%) up 1.7%. "Obviously there have been concerns about that package. But it's been pretty well flagged and most people have been saying its passage would provide certainty about what regulations will be imposed," said Justin Gallagher, RBS Head of Sales in Sydney. Tech shares were leading losses earlier in Taiwan as traders said the euro's weakness and a possible slowdown in European economic growth put exports to that region at risk, but some issues came back as investors sought bargains. Taiwan Semiconductor Manufacturing Corp. (TSM 9.63, -0.19, -1.93%) fell 0.2%, United Microelectronics Corp. (UMC 3.06, -0.21, -6.42%) was flat. But Hon Hai Precision was down 2.2%. In Tokyo, all of the Topix's 33 subsectors lost ground as general risk aversion dented demand, while the yen's recent gains against the U.S. dollar and the euro hurt exporters. But the yen gave back some of those gains in Friday's trade, following a warning from Japan's finance minister about excessive yen strength. "Markets in principle should determine foreign-exchange rates, but I think we must closely watch (markets) and ensure that there won't be any excessive yen rises," Japanese Finance Minister Naoto Kan said at a news conference. Automakers and technology stocks were down but most ended well off their morning lows. Toyota Motor Corp. (JP:7203 3,355, -65.00, -1.90%) fell 1.9%, Honda Motor Co. (JP:7267 2,823, -73.00, -2.52%) (HMC 30.79, -1.36, -4.23%) was down 2.5% and Nissan Motor (JP:7201 674.00, -24.00, -3.44%) (NSANY 15.00, -0.64, -4.09%) was down 3.4%. In the tech sector, Canon Inc. (JP:7751 3,725, -100.00, -2.61%) (CAJ 41.13, -1.47, -3.45%) dropped 2.6%, and Sharp Corp. (JP:6753 1,010, -25.00, -2.42%) was off 2.4%

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