HONG KONG: Asian shares tumbled and the euro hit a four-month low on Tuesday amid growing concern about Greece's eurozone future as talks on forming a government remain deadlocked.
Dealers are also keeping an eye on Spain as the country's banking sector comes under huge pressure while Italy saw the ratings of 26 of its lenders downgraded amid fears over their exposure to the region's debt crisis.
Tokyo fell 1.20 percent by the break, Hong Kong shed 0.33 percent, Shanghai was 0.73 percent lower, Sydney gave up 0.98 percent and Seoul slipped 1.42 percent.
The losses were in line with Wall Street, which has also been infected by eurozone fear. The Dow fell 0.98 percent, the S&P 500 dropped 1.11 percent and the Nasdaq slipped 1.06 percent.
Greece's politicians have for the past week failed to come to agree on a coalition government after May 6 polls saw 70 percent of the electorate vote against the ruling parties who introduced austerity measures needed to qualify for bail-out cash.
The heads of the main groups, including the anti-cuts radical left Syriza party, are set to meet later Tuesday for talks on forming a technocratic government.
Another failure to reach agreement will see fresh elections next month that observers suggest would see a better turnout for Syriza, which came second in the election and has said it will tear up a deal Athens struck with creditors for last year's bail-out.
Such a scenario would see Greece default on its huge debt servicing and its eventual exit from the eurozone, a possibility many say is increasingly possible, with top officials seemingly acknowledging so.
European Commission president Jose Manuel Barroso said Greece should "leave the euro if it fails to respect the strict rules it agreed to.
The growing crisis sent the euro to its lowest level since mid-January against the dollar.
The single currency bought $1.2825 in early trade, compared with $1.2823 late Monday in New York, while it was at 102.38 yen from 102.37 yen.
The dollar was at 79.81 yen, up slightly from 79.84 in New York.
On oil markets New York's main contract, West Texas Intermediate crude for delivery in June was down 47 cents to $94.31 per barrel while Brent North Sea crude for June shed 57 cents to $111.00 in morning trade.
Gold was at $1,553.40 an ounce at 0230 GMT, compared with $1,562.76 late Monday. (AFP)