A slide on Asia's equity markets heading into the weekend weighed heavily on German shares, causing the index of the country's top 30 listed companies to fall to levels not seen since May 2005. In midmorning trading the DAX was down 6.8 percent at 4,203 points.
Automaker stocks were under particular pressure, with VW off by 10 percent, Daimler down 11 percent, and BMW by 8 percent.
The euro also took a beating on Friday, hitting a new low against the greenback as foreign investors from Asia and elsewhere pulled out of the single currency to bring their money home. In early trading the euro fell to $1.2624 – the lowest exchange rate this year.