LONDON – The shockwaves from Greece’s failure to form a coalition government continued to reverberate around markets on Wednesday, with investors concerned that the country was heading for the euro exit door, thereby fracturing Europe’s single currency.

Greece is headed for another general election next month after nine days of unsuccessful talks since the May 6 poll yielded a split vote with no one party able to govern on its own.

The next election could well become a referendum over Greece’s place in the euro – which could mean the established Greek political parties that took a hammering in the first poll might do better. However, markets are still worried that Syriza, the radical left coalition that came a surprise second in the first election, may actually emerge as the biggest party in the next time round. Led by Alexis Tsipras, Syriza has steadfastly stood to its anti-austerity, anti-bailout position.

“The fear is that the anti-austerity vote will grow,” said Fawad Razaqzada, market strategist at GFT Markets. “The big issue is how this squares with the Greeks’ desire to keep the euro as their currency.”

Without agreeing to another round of austerity measures, it’s conceivable that Greece’s partners in the eurozone will withhold the next round of bailout cash that’s keeping it afloat. An exit from the euro could then become inevitable.

In Greece, that prospect has led to further outflows of Greek deposits, with some (euro) 800 million thought to have made their way out of Greek banks since the election. Those deposits may have found their way into safe-haven alternatives, such as German and British ten-year bonds, which have risen to record highs in the secondary markets. The dollar has also mustered a lot of support through its perceived-status as a safe haven asset, especially against the euro, which has sunk to near four-month lows of around $1.27.

Stocks, widely viewed as riskier assets, have taken a battering amid the political uncertainty in Greece, not least in Athens when the main market is trading at near 20-year lows.

“Equity markets remain under pressure as investors fret about the consequences of a Greek exit from monetary union,” said Neil MacKinnon, global macro strategist at VTB Capital. “The likelihood of this happening, in our view, is high but the crisis will not stop with a Greek exit.”

Elsewhere in Europe, the FTSE 100 index of leading British shares was down 1 percent at 5,381 while Germany’s DAX fell the same rate to 6,338. The CAC-40 in France was 0.1 percent lower at 3,037.

The bonds of Spain and Italy were under pressure too as investors worried about contagion from the Greek crisis. If Greece leaves the euro, then a precedent would’ve been set that could be taken up by other countries burdened by high debt levels. The yield on Spain’s ten-year bond, a gauge of investor concerns, was up at 6.33 percent, while Italy’s rose to 5.85 percent. Though down on the levels they hit last November, the two rates are uncomfortably near the 7 percent level, widely-considered to be unsustainable in the long-run.

Wall Street was poised for a subdued opening, with both Dow futures and the S&P 500 futures down 0.1 percent.

Earlier, Asian benchmarks recorded sharp losses earlier in the day.

Japan’s Nikkei 225 index dropped 1.1 percent to close at 8,801.17, its lowest close since Jan. 30, amid discouraging economic news. Core private-sector machinery orders fell 2.8 percent in March, the first drop in three months, Japan’s Cabinet Office said.

Hong Kong’s Hang Seng plummeted 3.2 percent to 19,259.83 and South Korea’s Kospi fell 3.1 percent to 1,840.53.

Mainland Chinese shares also lost ground, with the benchmark Shanghai Composite Index falling 1.2 percent to 2,346.19. The Shenzhen Composite Index dropped 1.4 percent to 942.04.

Oil prices tracked equities lower amid the economic uncertainty – the main New York rate was down $1.54 at $92.50 a barrel.

Pamela Sampson in Bangkok contributed to this story.