HONG KONG - Asian markets and the euro fell Wednesday on fears Greece could leave the eurozone after the country's second biggest party said it would rip up a bailout deal following weekend elections.

The anti-austerity Syriza leftists said Sunday's polls showed Greeks had rejected the strict cuts imposed as part of plans to clear up Athens' mountain of debts.

Their warning came as European leaders began drawing up plans to introduce more growth measures after furious voters kicked out pro-austerity leaders elsewhere in the continent, including France.

Tokyo fell 1.49 per cent, or 136.59 points, to 9,045.06 and Seoul dropped 0.85 per cent, or 16.72 points, to 1,950.29.

Sydney fell 0.91 per cent, or 39.2 points, to 4,275.1 after the government unveiled a budget Tuesday aiming to reverse its deficit and put the economy in surplus by next year.

Hong Kong shed 0.75 per cent, or 154.11 points, to 20,330.64 and Shanghai closed down 1.65 per cent, or 40.29 points, at 2,408.59.

Syriza leader Alexis Tsipras said Tuesday his cabinet would reject all austerity measures imposed under an EU-IMF deal if he could form a new government.

"The public verdict has clearly nullified the loan agreement and (pledges) sent to Europe and the (International Monetary Fund)," he said in a televised address, in which he called the bailout terms "barbaric".

His comments fuelled expectations that Greece would be denied any fresh cash to service its debts, which would lead it to default and eventually tumble out of the eurozone.

Tsipras was asked to form a government after the biggest party, New Democracy, failed to do so following a battering for it and socialist Pasok - the nation's two main groups which had pledged to continue with deep cuts - in Sunday's vote.

He has been given three days to agree with other parties to form a government, although many analysts now expect another general election to be held next month.

"The failure of the Greek election to produce a new government provides some support to our view that Greece could leave the eurozone as soon as the end of this year," London-based Capital Economics said in a note.

The concerns pressured the euro, which fell to US$1.2990 (S$1.63) and 103.70 yen (S$1.60) in late afternoon Asian trade, compared with US$1.3005 and 103.84 yen in New York late Tuesday. The dollar was at 79.79 yen, compared with 79.84 yen.

"The situation in Greece remains worrisome, especially with respect to the euro," said Toshiyuki Kanayama, market analyst at Monex brokerage.

Events in Europe, which also saw Francois Hollande oust Nicolas Sarkozy as French president on a platform of pushing growth and less austerity, and similar results in local polls in Germany and Italy, have led to moves to rebalance economic policy.

EU president Herman Van Rompuy announced an informal meeting in May of leaders before a summit scheduled for June, while European Commission head Jose Manuel Barroso urged agreement "that shifts the focus of spending to growth-enhancing measures".

World markets fell on Tuesday, following a mostly upbeat response the previous session to Sunday's polls.

In Paris the CAC 40 lost 2.78 per cent, while Frankfurt's DAX 30 shed 1.90 per cent and the FTSE in London slipped 1.78 per cent.

Greek stocks gave up another 3.62 per cent after falling 6.67 per cent on Monday, and are now at their lowest levels in about two decades.

On Wall Street the Dow closed 0.59 per cent lower, the S&P 500 fell 0.43 per cent and the Nasdaq dropped 0.39 per cent.

Oil prices eased Wednesday amid concerns on demand from Europe, although bargain-buying provided some support.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in June, was down 30 cents at $96.71 per barrel while Brent North Sea crude for June shed 24 cents to US$112.49 in late afternoon trade.

Gold was at US$1,592.58 an ounce at 0805 GMT, compared with US$1,626.80 late Tuesday.

In other markets:
- Taipei fell 0.93 per cent, or 70.00 points, to 7,475.71. Hon Hai Precision shed 1.36 per cent to end at Tw$87.3) (S$3.71) while Taiwan Semiconductor Manufacturing Co was 0.24 per cent higher at Tw$84.6.

- Manila closed 0.52 per cent lower, giving up 27.27 points to 5,214.79. Philippine Long Distance Telephone shed 0.63 per cent to 2,520 pesos (S$0.05), BDO Unibank shed 2.60 per cent to 63.75 pesos and Megaworld rose 2.73 per cent to 2.26 pesos.

- Wellington closed 0.21 per cent, or 7.41 points, higher at 3,559.47. Fletcher Building fell 0.64 per cent to HK$6.18 (S$1), Contact Energy was 1.22 per cent lower at HK$4.84 and Telecom surged 2.72 per cent to HK$2.64.