Investors in Asia sought safer havens for their investments on Monday after Greece voted 'No' to harsh bailout conditions in a crucial referendum held on Sunday.
Amid the sea of red, China was the lone bright star after a raft of support measures unleashed over the weekend calmed jittery sentiment which sparked a 30 percent correction over the past two weeks.
All eyes on Greece
Over the weekend, 61 percent of voters rejected the terms of new financial aid, which included demands for tax hikes and pension cuts in Greece. The result - more definitive than polls had predicted - will likely increase Greece's chances of exiting the euro zone, analysts said.
"The unexpected 'No' vote in the Greek referendum will produce significant uncertainty over the next 48 hours. It will be very difficult for a new deal to be struck without significant concessions from the Greeks while [Prime Minister Alexis] Tsipras' victory will make that unlikely," analysts from BNP Paribas wrote in a note, adding that the chance of a "Grexit" is now at 70 percent.
Apart from equities, currencies also witnessed sharp movements amid increasing risks of the euro zone losing a member. The euro fell as low as $1.0967 before clawing back some lost ground to trade at $1.1040. The Australian dollar lost 0.3 percent of its value against the U.S. dollar, hitting $0.7485 - its lowest level since May 2009.
On the other hand, the Japanese yen strengthened on the back of safe haven bids, trading around 122.3 versus the greenback.
U.S. equity futures fell 1.5 percent earlier in the session, indicating a lower open for Wall Street which was closed for the U.S. Independence Day holiday on Friday.
Governments in Asia also reacted to the latest developments in Greece, with senior South Korea economic and financial policymakers scheduling an early meeting. Meanwhile, Bank of Japan Governor Haruhiko Kuroda said the central bank will monitor financial market developments carefully to ensure Japan responds smoothly to any market response.
However, analysts expect the wave of risk aversion in Asian markets to be temporary.
"There are various factors that suggest this is going to be a very short-lived selloff in the region. It's just knee-jerk reaction and the most likely scenario is that [Greece] is not going to [cause] a significant systemic contagion to Asia," Rob Subbaraman, MD, chief economist and head ofglobal markets research at Nomura, told CNBC Asia's "Squawk Box."