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."
Mainland indices higher
China's Shanghai Composite index closed up 2.4 percent in choppy trade. Earlier in the afternoon session, the bourse pulled back into neutral territory after surging as high as 7.8 percent at the start of trade.
The CSI 300 index advanced 2.9 percent, but the smaller Shenzhen Composite erased earlier gains of more than 4 percent to fall nearly 3 percent.
The rare strength in mainland stock markets can be attributed to the salvo of support measures orchestrated by Beijing over the weekend.
After the stock market close on Friday, the China Securities Regulatory Commission (CSRC) said China would cut initial public offerings (IPOs) and capital raisings and support long-term investors entering the market to help stabilize prices. The People's Bank of China (PBOC) also rolled over 250 billion yuan of medium-term loans to banks late on Friday to ensure adequate liquidity in the system which is an important tool to shore up market psychology, according to Bank of America Merrill Lynch.
Meanwhile, China's top 21 securities brokerages said on Saturday that they would collectively invest at least 120 billion yuan ($19.3 billion) to help stabilize the country's stock markets after a slump of nearly 30 percent since mid-June.
"There's a very good chance we see a strong bounce in China today which will offset some of the concern from Greece, but it remains to be seen how long the bounce will last for," Adam Reynolds, APAC CEO of Saxo Capital Markets, told CNBC.
IG's market strategist Bernard Aw agrees: "For the time being, Chinese traders are increasingly nervous about the outlook of the stock market. It is quite likely that the decline may continue this week, however, the pace of the fall may be slower."
Read MoreIs the China stock party back on?
In Hong Kong, the index reversed direction to slump 3.2 percent, hitting a near three-month low, as index heavyweight Hong Kong Exchanges and Clearing plunged 9 percent.
Nikkei skids 2.1%
Japan's finished at a one-week low, as a stronger local currency took a toll on export-oriented plays.
Carmakers such as Honda, Suzuki Motor and Nissan lost between 1.8 and 3.3 percent, while Sony and Panasonic tumbled more than 2 percent each. Toshiba halved losses to trade 2.7 percent lower on Monday, following news that an ongoing third-party investigation into accounting practices was finding more irregularities than previously expected.
ASX tanks 1.1%
Australia's S&P ASX 200 index extended its negative streak amid a broad-based selloff.
Miners and oil producers were among the hardest-hit; market bellwether BHP Billiton and Rio Tinto eased more than 2 percent each. Oil Search and Santos shaved off 4 and 3.4 percent, respectively, after crude oil prices tumbled in Asian trade.
Outperforming the bourse, NSL Consolidated closed up 8.3 percent after receiving a purchase order from India's BMM Ispat. Gold miners also bucked the downtrend as safe-haven bids pushed up gold prices. Evolution Mining topped the leaderboard with a 7.4 percent surge, while Newcrest Mining piled on 2.6 percent.
Kospi falls 2.4%
South Korea's Kospi index doubled losses in the afternoon session to eventually finish Monday with its sharpest one-day loss since June 2012.
Brokerage houses bore the brunt of the selloff; Daewoo Securities plummeted 7.4 percent, while Samsung Securities and Mirae Asset Securities plunged more than 5 percent each.
Blue chips were also among the biggest laggards on Monday; the top weighted stock Samsung Electronics closed down 3 percent ahead of its earnings guidance on Tuesday, while Hyundai Motor and steelmaker Posco tanked 1.5 and 2.7 percent, respectively.
Emerging Asia eyed
According to Nomura's Subbaraman, Southeast Asian markets are more vulnerable to the Greece-induced selloff than its peers, in particular Indonesia and Malaysia.
The FTSE Bursa Malaysia KLCI index closed down 0.99 percent, while the ringgit dropped 0.7 percent of its value against the greenback to touch its lowest level since September 1998. Against the Singapore dollar, the ringgit hit a new record low of 2.7691.
Apart from uncertainty in global markets, a rise in political tension at home is also sapping risk appetite in Malaysia. Last week, a report by Wall Street Journal said nearly $700 million of deposits were flowed into what are believed to be the personal bank accounts of Malaysian Prime Minister Najib Razak. Over the weekend, the embattled Prime Minister said he will decide whether to take legal action against the WSJ.