Share prices of European automakers and related industries fell sharply on Friday morning as news of the Senate collapse of a Detroit Three bailout travelled across the Atlantic.

Shares prices of miners, metals and oil companies also dipped, Reuters reported.

Asian markets reacted overnight with shares in Toyota losing a tenth of their value, the news agency said. Honda and Nissan Motor stock was also reported off a similar amount.

"If one of the big auto companies goes bust in the US, this could see a collapse in the entire supply chain." Frankfurt Finanza strategist Heino Ruland told Reuters.

General Motors said the bailout's collapse had worsened its situation though Opel was not affected. The German unit already has sought funding guarantees from the German government to help it weather the downturn.

"If any one of [the Detroit Three] fails, it will create an endless vicious circle in the global economy as the auto sector hires so many and there are so many industries that rely on the sector," Kim Jae-eun, an economist at Hana Daetoo Securities in Seoul told the news agency earlier on Friday.

"That will incapacitate all worldwide efforts, including hefty interest rate cuts and massive fiscal spending, to revive the economy," she added.

"Everybody knows that a failure will badly hit the economy and financial markets. That will need much bigger stimulus packages to avoid more shocks," said JPMorgan Chase economist Lim Ji-won.

Reuters noted that a Big Three bankruptcy would also exacerbate the credit crisis, partly because of the vast amount of debt issued over the years by the car makers and their related financing companies.

About 10% of the junk bond market is tied to GM, Ford and its financing arms, while $250 billion of credit default swaps (CDS) have been written on Ford, GM, Ford Motor Credit and GMAC, the news agency said, citing data from securities transaction clearing house Depositary Trust and Clearing.

"It's a big setback because the markets have been waiting for this (bailout bill) to pass," Singapore-based chief Asian economist at Credit Suisse, Joseph Tan, told Reuters.

"What the failure of this deal does is it will set back sentiment not only in the US, but also globally. There is going to be further risk aversion going forward."

The BBC reported that Japan's Nikkei share index fell 484.68 points, or 5.6%, to 8,253.87, while Hong Kong's Hang Seng index sank 6.9% and other regional markets also fell.

In Europe, the FTSE fell 2.7% in early trading, the Cac 40 fell 4.7% and the Dax fell 3.4%.

"It's a very bad sign. US stocks will likely nosedive," Yasutoshi Nagai, chief economist at Daiwa Securities, told the broadcaster.

That report said the Japanese government may be forced to intervene to stop the yen strengthening further against the US dollar.

"Without an intervention, the dollar could hit 85 yen, so Japan will likely intervene to prevent that from happening," Masafumi Yamomoto at the Royal Bank of Scotland in Tokyo told the BBC.