Asia stocks at 2-yr low as oil edges up

Asian stocks fell to a two-year low on Friday, down for a fourth straight week, after a surge in oil prices above $121 enflamed inflation worries and the spiralling financial crisis showed no signs of ending.
European stock index futures rose, with commodity stocks likely to benefit from strong metal and crude prices.
Crude prices have gained more than 6% this week on escalating tensions between the United States and Russia, the world's second-largest oil exporter. Russia's military intervention in Georgia has disrupted crude transit and supported prices.
A rise in commodity prices cut a two-week rally in the U.S. dollar short, though analysts said the currency's 1.3% decline this week was understandable given its stellar recently and that an upward trend is still intact.
Investors' anxieties about the financial sector remain unsoothed. Freddie Mac, one of the top U.S. mortgage finance companies, is talking with private-equity and other investors about buying some shares but faces fears that a government bailout would wipe out any investment, The Wall Street Journal said.
Japan's Nikkei share average fell 0.7% to 12,666.04, its lowest close in nearly five months, as exporters such as Honda Motor Co declined on a stronger yen.
"The trading environment is worse than yesterday as the yen became stronger after yesterday's close and oil prices rose sharply," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.
"Lingering worries about the global economy, including Japan, are also weighing on the market."
The MSCI pan-Asia stocks index was down 0.8%, after hitting a two-year low in early trade. The Asia-Pacific ex-Japan index edged up 0.2% but lost nearly 3.0% on the week.
South Korea's KOSPI shed 1.0% to a 16-month low, with shares of the country's top commercial lender, Kookmin Bank leading the index lower with a 6% fall.
HongKong's markets were shut because of a typhoon.