Asia markets retreat as Greece talks stumble

HONG KONG (AFP) - Asian markets turned negative Thursday on concerns about Greece's debt reform after talks between the country's officials and creditors fell apart and its leader accused them of rejecting his proposals.

While both sides agreed to resume talks later in the day, there are fears they could fail to reach an agreement to unlock crucial bailout funds, leaving Athens in default and possibly crashing out of the eurozone.

Tokyo slipped 0.46 per cent, or 96.63 points, to 20,771.40, Sydney shed 0.95 per cent, or 54.1 points, to close at 5,632.7 and Seoul was marginally lower, easing 0.47 points to 2,085.06.

Shanghai tumbled 3.46 per cent, or 162.37 points, to 4,527.78 as investors take profits after a surge of more than 140 percent over the past year, while a crackdown on margin trading has also seen a wind-down in trading.

Hong Kong ended 0.95 percent lower, giving up 259.22 points to 27,145.75.

Regional investors followed their colleagues in Europe and New York in selling after Athens and its creditors failed to achieve a breakthrough on overhauling Greece's bailout terms, just days before a June 30 deadline when it must make a debt repayment.

If a deal is not hammered out and Athens does not unlock much-needed bailout cash, it will default and possibly crash out of the eurozone, or even the European Union.

Global markets had been on a rally since Prime Minister Alexis Tsipras handed over Greek proposals at the start of the week, which were initially welcomed.

However, while some sources said the plans were 90 percent finalised, the two sides have been unable to agree a complete overhaul, with tax and pensions a key sticking point, and Tsipras accusing the other side of making fresh demands.

"This strange position maybe hides two things: either they do not want an agreement or they are serving specific interests in Greece," Tsipras said as he went into the talks.