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• Greek crisis deals blow Downunder
• Greeks dive for the bank under the bed
• NZ mostly protected in event of 'Grexit'
Europe's Stoxx 600 Index finished the day with a 2.7 percent drop from the previous close. The UK's FTSE 100 Index declined 2 percent, Germany's DAX sank 3.6 percent, and France's CAC 40 Index slid 3.7 percent.
Wall Street moved lower too. In late trading in New York, the Dow Jones Industrial Average dropped 1.58 percent, while the Standard & Poor's 500 Index slid 1.50 per cent, and the Nasdaq Composite Index shed 1.68 per cent.
Slides in shares of Visa and those of DuPont, down 2.7 percent and 2.6 percent respectively, led the drop in the Dow. All 30 stocks that make up the Dow last traded lower.
US Treasuries climbed, pushing yields on the 10-year yield note as much as 18 basis points lower. It recently traded 14 basis points lower at 2.34 per cent.
"A week ago, it seemed very likely that we were close to having a resolution, and now all of a sudden we're waking up to capital controls?" Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York, told Reuters. "I'm not confident that today reflects all the bad news that could happen. Investors are really bumping up the odds that Greece will exit the euro."
The latest US housing data offered a brighter note. The National Association of Realtors said its pending home sales index rose 0.9 percent to 112.6 in May, the highest level more than nine years.
"The steady pace of solid job creation seen now for over a year has given the housing market a boost," Lawrence Yun, NAR chief economist, said in a statement. "It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive."
Investors are focused on the latest government jobs report, due Thursday to gauge the odds the Federal Reserve will raise interest rates in September, as currently is widely expected. Thursday's report is expected to show a 230,000 increase in non-farm jobs this month, following a 280,000 gain in May. The jobless rate is expected to fall to 5.4 percent, down from 5.5 percent last month.
Indeed, Fed Bank of New York President William Dudley told the Financial Times in an interview that "if the data continue to evolve in the way they have, I think September is very much in play".