During late Asian trade, Hong Kong's Hang Seng Index plunged 0.95%, Australia’s ASX/200 Index tumbled 1.13%, Japan’s Nikkei 225 Index plummeted 1.23%.
Speaking at the ECB’s post-policy meeting press conference, Draghi said the bank may undertake bond purchases in order to bring down the "exceptionally high" borrowing costs of stressed euro zone members, but provided no specific details on how and when these activities may be carried out.
Draghi also said that any such action by the ECB was conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
Sentiment was also hit after the manufacturing purchasing managers’ index in China unexpectedly fell to 50.1 in July, the weakest in eight months, from 50.2 in June.
In Tokyo, the Nikkei was weighed by sharp losses in tech stocks and as Mario Draghi's remarks spurred risk aversion.
Electronics giant Sharp saw shares sink 28.46% and Sony plunged 7.16, after both companies disappointed with heavy quarterly losses and cut in their full-year earnings outlook. In addition, JPMorgan downgraded Sharp to "underweight" from "overweight".
On the upside, Fast Retailing jumped 3.03%, as the operator of Uniqlo fashion chain said its July same-store sales 2% decline was better than expected.
Meanwhile, shares in Hong Kong were hit by steep losses in insurance companies, most notably AIA Group, down 2.04% after its parent American International Group said a drop in the fair value of their AIA stake hurt second-quarter profit.
Meanwhile, shares in Australia fell, as miners were hit by softer commodities prices and the lack of imminent stimulus plans in the euro zone.
Mining giants BHP Billiton and Rio Tinto dove 2.40% and 4.45% respectively. Separately, BHP said that it would take a USD2.84 billion write down on its U.S. shale gas business and a further USD450 million write down on Australian Nickel operations.
Financial stocks were also hit, as shares in the country's biggest lender, Commonwealth Bank of Australia, tumbled 1.15%, while Westpac lost 1.02%.
Looking ahead, the outlook for European stock markets was moderately higher, as investors focused on the release of a key U.S. employment report later in the day.
The EURO STOXX 50 futures pointed to a rise of 0.29% at the open, France’s CAC 40 futures added 0.14%, London’s FTSE 100 futures eased up 0.04%, while Germany's DAX futures pointed to a 0.23% increase.
Later Friday, the U.S. was to release government data on non-farm employment change and the unemployment rate. The Institute of Supply Management was also to publish a report on non-manufacturing activity
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