Asian stocks and the euro fell on Monday after European finance heads failed to agree a plan to solve the region's debt woes, while they also put off a decision on releasing rescue funds to Greece.
The keenly-watched meeting in Poland on Friday highlighted divisions between Europe and the United States over the best way forward for the region, raising fears of another global financial crisis.
Sydney lost 1.64 percent, or 67.9 points, to end at 4,081.5, while Seoul shed 1.04 percent, or 19.15 points, to 1,820.95.
Hong Kong fell 2.30 percent in the afternoon and Shanghai was 1.56 percent lower.
Tokyo was closed for a public holiday.
Eurozone finance ministers said Friday they would delay until October a decision on eight billion euros ($11 billion) of bailout cash for Greece, which it cannot tap until has persuaded auditors it is on track to cut its deficit.
Greek leaders will hold talks with key European and international lenders on Monday to convince them Athens will be able to meet its obligations to reduce its huge deficit.
"With the next tranche of Greek bailout funding still no certainty the market is once again pondering the magnitude of a sovereign default on global markets," Ben Potter, a market strategist at IG Markets in Sydney, told Dow Jones Newswires.
Friday's announcement of a delay in the funding decision came despite the United States warning of "catastrophic risks" to financial markets if the EU does not quickly contain the crisis, revealing the divisions across the Atlantic over the best way forward.
Sony Kapoor, head of the Re-define think tank, told AFP that "the otherwise fractious European Union leaders have united in their criticism of the markets, the IMF and now (US Treasury Secretary) Tim Geithner -- for being honest about the scale of problems facing the eurozone".
Markets are growing concerned that Italy will follow Greece, Ireland and Portugal in calling for bailout funds to help cope with its huge debt burden.
Eyes are now on a two-day meeting this week of the US Federal Reserve's policy setting committee, which dealers hope will give a much-needed boost to sentiment with fresh monetary easing measures.
It "is very unlikely that this discussion ends with no action being taken", DBS Bank said in a market commentary.
Asian markets had rallied before the meeting on Friday after the European Central Bank and its US, Japanese, Swiss and British counterparts offered to inject US dollars into lenders squeezed by Europe's debt crisis.
However Credit Agricole said in a note to clients: "Any improvement in sentiment following the US dollar liquidity announcement by various central banks last week is already filtering away against the background of EU officials' failure to make any headway over the weekend."
The downbeat news from Poland put fresh downward pressure on the euro Monday, virtually wiping out its strong gains on the back of the central banks' move.
The single currency was at $1.3665 in early Asian trade, from $1.3802 late Friday in New York, and at 105.10 yen, from 105.91 yen.
The dollar was at 76.91 yen, compared with 76.82 yen.
New York's main contract, light sweet crude for delivery in October, fell $1.26 to $86.70 a barrel in morning trade and Brent North Sea crude for November slipped 90 cents to $111.32 a barrel.
Safe-haven gold fetched $1,821.20 an ounce by 0600 GMT.
In other markets:
-- Taipei fell 1.27 percent, or 96.52 points, to 7,480.88.
Fubon Financial dived 5.5 percent to Tw$35.25 and Cathay Financial fell 1.5 percent to Tw$35.65, while computer maker Acer tumbled 4.9 percent to Tw$34.00.
-- Manila gained 0.42 percent, or 17.82 points, to 4,307.99.
Philippine Long Distance Telephone rose 0.7 percent to 2,316 pesos, shopping mall operator SM Prime Holdings gained 0.2 percent to 13.02 pesos and Filinvest Land was up 1.7 percent to 1.22 pesos.
-- Wellington shed 0.13 percent, or 4.37 points, to close at 3,288.31.
Contact Energy gained one percent to NZ$5.27 and Sky City closed 0.9 percent higher at NZ$3.51, while Fletcher Building fell 1.8 percent to NZ$7.45 and Telecom closed 0.6 percent lower at NZ$2.56.