Asian markets mostly fell on Tuesday following losses on Wall Street as initial excitement over a multi-billion-dollar bailout for Spain's banks faded.
The optimism over the weekend deal worth up to $125 billion was replaced by concerns about the practicalities of implementing the bailout and fears it would not be enough to avert a broader catastrophe in the eurozone.
Tokyo was 1.02 percent lower, shedding 88.18 points to 8,536.72 while Seoul fell 0.66 percent, or 12.30 points, to 1,854.74.
Hong Kong fell 0.43 percent, or 81.07 points, to 18,872.56, while Shanghai closed down 0.70 percent, or 16.07 points, at 2,289.79.
Sydney however rose 0.23 percent, or 9.2 points, to 4,072.9 as it caught up with regional gains from Monday when it was closed for a holiday.
Asian stocks surged on Monday and the single currency strengthened, a burst of optimism that was initially followed in Europe and the United States.
But the rallies proved short-lived, with London closing almost unchanged and the Dow Jones Industrial Average down 1.14 percent. Madrid advanced almost six percent in early trade only to close down 0.54 percent.
As fears over Europe's debt crisis resurfaced, the yield on Spain's 10-year bond rose to 6.48 percent Monday, higher than Friday's close, after Fitch downgraded Spain's two largest banks.
"Spain has been offered a line of credit and it is already weighed down with too much debt. It is just going to delay the inevitable," Ben Taylor, a sales trader at CMC Markets, told Dow Jones Newswires.
Investors were also looking to the weekend when Greece holds elections amid fears that a victory for anti-austerity groups could lead to Athens making a disorderly exit from the euro.
Michael Kurtz, head of global equity strategy at Nomura in Hong Kong, said Madrid's bailout agreement was a "tactical engagement in a very long war".
He added: "I don't believe that there is one make or break moment, but the Greek election is going to be very important."
The euro, which weakened in New York, edged up a tad in Asia.
The common currency bought $1.2485 in the afternoon Tuesday, compared with $1.2482 in New York late Monday. However, it is still down from the levels above $1.26 it touched in Asia earlier on Monday.
Against the Japanese currency the euro rose to 99.30 yen from 99.13 yen in New York.
The dollar rose to 79.54 yen from 79.43 yen.
New York's main contract, light sweet crude for delivery in July, was down 86 cents at $81.84 a barrel, a level last seen in October. Brent North Sea crude for July delivery shed 60 cents to $97.40 in the late afternoon.
Gold was at $1,589.60 an ounce at 0830 GMT, compared with $1,592.30 late Monday.
In other markets:
-- Taipei closed 0.68 percent, or 48.15 points, lower at 7,072.08.
Taiwan Semiconductor Manufacturing Co was 1.24 percent lower at Tw$79.4 while Hon Hai Precision lost 1.55 percent to close at Tw$82.5.
-- Wellington fell 0.83 percent, or 28.64 points, to 3,425.60.
Telecom eased 1.9 percent to NZ$2.39, Fletcher Building lost 1.1 percent to NZ$6.28 and Air New Zealand dropped 1.16 percent to NZ$0.86.
-- Manila was closed for a public holiday.