Mainland shares endured a sharp selloff late Thursday, while other regional bourses saw lackluster trade after negotiations between Greece and its creditors hit a stalemate overnight.
The Eurogroup meeting ended on Wednesday without any agreement, raising the risks of a Greek debt default once again. Officials are slated to reconvene on Thursday, according to Finland's finance minister.
"There is still time to agree a short-term plan so that Greece can get funding in exchange for reforms and therefore avoid capital controls and ultimately achieve the payment to the International Monetary Fund (IMF). However, time is slipping away and things are looking precarious, specifically for the Greek public," Chris Weston, IG's chief market strategist, wrote in a note Thursday.
Overnight, U.S. stocks finished in the red, with the Dow Jones Industrial Average ending nearly 1 percent lower. The S&P 500 and tech-heavy Nasdaq shaved off 0.7 percent each as investors dropped riskier assets like stocks amid the rising possibility of a Greek default.
Shanghai Comp tanks 3.4%
China's Shanghai Composite index turned sharply lower in the afternoon session to end down more than 3 percent, a reminder that last week's 13.3 percent correction may not be over, just yet.
Earlier in the week, HSBC had cautioned that the consolidation may continue in the near term as authorities moved to tighten margin lending.
Earlier in the session, the Shanghai index steadied at modest gains following news that authorities scrapped the 75 percent loan-to-deposit limit, which could mean more credit flows into the economy.
Property heavyweights were among the hardest-hit, with Shanghai Shimao and Gemdale losing 6.5 and 4.3 percent, respectively.
Nikkei slips 0.5%
Japan's Nikkei 225 retreated from Wednesday's 18-year high as traders took profits after the recent rally.
A nearly 3 percent slump in heavyweight component Fanuc also weighed down on the bourse.
ASX drops 1%
Australia's S&P ASX 200 index closed down amid a broad-based selloff.
Energy and gold-related counters traded on the back foot due to weaker commodity prices in Asian trade. Evolution Mining and Newcrest Mining tanked 2.4 and 1.3 percent, respectively, while Santos declined 2 percent.
Banking heavyweights contributed further downside pressure, as Westpac led losses with a 1 percent decline.
On the corporate news front, mining contractor Macmahon Holdings, which entered a trading halt in the previous session, announced the sale of its Mongolian business early Thursday.
Meanwhile, the chief of Atlas Iron told Australian media that he is confident shareholders will vote in favor of capital raising at a meeting tomorrow. The dramatic slide in iron ore prices has forced the miner to slash costs and cut staff numbers earlier this year. Trading in its stock was halted early April.
Kospi sheds 0.1%
Samsung C&T lost 3.4 after the construction and trading firm denied reports on Wednesday that its co-CEOs are planning to visit the New York-headquarters of the Institutional Shareholder Service to explain the legitimacy of its planned merger with Cheil Industries.
Shares of Cheil Industries - the de facto holding group of Samsung Group - reversed a higher open to sag 0.6 percent.
Meanwhile, the pharmaceutical sector continued to outperform, with a gauge of healthcare stocks jumping 7.4 percent. Within the sector, Daewoong Pharmaceutical and Hanmi Pharmaceutical leaped 18.3 and 6.6 percent, respectively.