Asian stocks fell after European leaders gave Greece until Sunday to submit a new set of reforms or be thrown out of the currency union.

The MSCI Asia Pacific Index dropped 0.3 percent to 143.29 as of 9:01 a.m. in Tokyo. Sunday now looms as the climax of a five-year battle to contain Greece’s debts, potentially splintering a currency that was meant to be irreversible and throwing more than a half-century of economic and political integration into reverse. German Chancellor Angela Merkel conceded that she is “not especially optimistic” that a solution can be found.

While the Standard & Poor’s 500 Index climbed 0.6 percent on Tuesday, the Stoxx Europe 600 Index sank 1.6 percent. With markets in China and Hong Kong yet to open, futures indicated no pause in the selloff. Contracts on the FTSE China A50 Index dropped 1 percent in most recent trading. Those on the Hang Seng China Enterprises gauge of mainland shares in Hong Kong, which entered a bear market Tuesday, tumbled 3.9 percent.

Japan Topix index lost 0.4 percent. South Korea’s Kospi index gained 0.2 percent. New Zealand’s NZX 50 Index was little changed. Australia’s S&P/ASX 200 Index slipped 0.3 percent.

The Hang Seng China Enterprises Index sank 3.3 percent on Tuesday, bringing losses from a May peak to 20 percent. The Shanghai Composite Index slid 1.3 percent.

Source : Bloomberg