07/08/2015 03:46 EDT | Updated 07/07/2016 05:59 EDT

Asia stocks fall as China sell-off spills into Hong Kong; Europe up as Greece gets last chance

HONG KONG - Hong Kong's main stock index plummeted as much as 8.5 per cent on Wednesday as a sell-off in mainland Chinese shares accelerated despite new measures to support the market.

The China rout also battered investor sentiment elsewhere in Asia, with other major markets finishing sharply lower. European benchmarks, though, opened higher and the euro rose as investors there woke up to news that European leaders gave Greece a last-minute chance to avoid a ruinous exit from the euro currency.

In early European trading, France's CAC 40 rose 0.5 per cent to 4,626.03 and Germany's DAX edged up 0.1 per cent to 10,688.83. Britain's FTSE 100 added 0.4 per cent to 6,456.49. U.S. stocks were poised to open lower. Dow futures were down 0.9 per cent to 17,519.00 and S&P 500 futures lost 1 per cent to 2,052.50.

In Asia, Hong Kong's Hang Seng tumbled in the last hour of trading, a victim of the turmoil in mainland Chinese markets, where stocks have been sliding for three weeks despite increasingly desperate measures by authorities to stem the decline. The Hong Kong index trimmed its losses in the final minutes of trading to close 5.9 per cent lower at 23,516.56.

The Shanghai Composite ended nearly 6 per cent lower at 3,507.19 despite the latest slew of official measures aimed at supporting the stock market. Measures unveiled Wednesday included the government ordering state-owned companies to buy shares. Beijing also hiked the amount of equities insurance companies can hold and promised more credit to finance trading.

In an unusual tactic to stem the losses, more than 1,000 Chinese companies have had their shares suspended from trading or are applying for such permission, according to a report in the newspaper China Business News. That would be almost 36 per cent of the total of 2,802 companies traded in Shanghai and Shenzhen.

"Everyone has come back to reality. The so-called bull market is over for now," said Jackson Wong, an associate director at United Simsen Securities Ltd.

He said the Hong Kong plunge may have been exacerbated by mainland Chinese panic selling their holdings in Hong Kong because their shares on mainland markets were frozen.

The Shanghai benchmark is down more than 30 per cent since peaking June 12 after a sizzling yearlong rally.

Millions of novice investors piled into the Chinese market when it was at its most frothy. Some made big profits but the slump has left many with shares worth less than they paid and hoping for a rebound so they can sell.

Among other Asian markets, Japan's Nikkei 225 fell 3.1 per cent to 19,737.64 and South Korea's Kospi lost 1.2 per cent to 2,106.21. Australia's S&P/ASX 200 shed 2 per cent to 5,469.50.

Elsewhere, frustrated European leaders fearing for the future of their common currency gave the Greek prime minister a last-minute chance Tuesday to finally come up with a viable proposal on how to save his country from financial ruin. Overcoming their surprise when Alexis Tsipras failed to present them with a detailed reform blueprint, the leaders reluctantly agreed to a final summit on Sunday.

Indebted Greece needs a financial lifeline from its European creditors who have been pressing for more austerity in exchange for bailout funds. Without that it's expected to default, paving the way for its exit from the euro currency.

In energy trading, benchmark U.S. crude was down 26 cents to $52.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to close at $52.33 in New York on Tuesday. Brent crude, the international benchmark, rose 11 cents to $56.96 a barrel in London.

The euro rose to $1.10041 from $1.1008 on Tuesday. The dollar was little changed at 121.51 yen from 122.52 yen.