Asia stocks fall amid political turmoil in Greece

Asian stocks fell Wednesday after a failure by Greece's political leaders to form a coalition government set the stage for new elections next month, keeping Europe's debt crisis centerstage.

Japan's Nikkei 225 index dropped 0.8 percent to 8,831.04 as investors remained focused on the turmoil in Greece. South Korea's Kospi fell 1.3 percent to 1,874.82 and Australia's S&P/ASX 200 lost 1.8 percent to 4,190.20 amid sliding commodities prices.

Newly elected Greek leaders — hotly divided over how to resolve the country's economic crisis — failed Tuesday to form a new government. That means new elections must be held in June.

Traders fear a win by parties that oppose highly controversial austerity measures necessary for Greece to qualify for urgently needed bailout money. Without the money, the country would likely default on its debt and leave the euro common currency.

"The Greek crisis will continue to frustrate markets, keeping sentiment under pressure," analysts at Credit Agricole CIB in Hong Kong wrote in an email.

Europe's latest political impasse cast a gloom over financial markets Tuesday. The euro plunged, and the Dow Jones industrial average extended a slide that has wiped out nearly 5 percent of its value in two weeks.

The Dow closed down 0.5 percent at 12,632. The Standard & Poor's 500 index finished down 0.6 percent at 1,330.66. The Nasdaq composite index fell 0.3 percent to 2,893.76.

Better news about the U.S. economy didn't help sentiment much. A measure of manufacturing activity in New York state jumped in May, reversing a large drop in April. Measures of new orders and employment rose.

And homebuilder confidence reached its highest level in five years in May, according to the National Association of Home Builders/Wells Fargo housing market index. Builders reported greater sales and higher traffic from prospective buyers.

Benchmark oil fell 83 cents to $93.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 80 cents Tuesday to finish at $93.98 per barrel in New York — oil hasn't finished that low since Dec. 19.

In currencies, the euro fell to $1.2728 from $1.2734 late Tuesday in New York. The dollar rose to 80.37 yen from 80.27 yen.