Asian stocks slid to their lowest level in nearly three months on Thursday and the euro wobbled as Greece's debt troubles deepened and fresh U.S. data indicated its economic soft patch could drag on longer than expected.

Greek Prime Minister George Papandreou said he will form a new cabinet on Thursday and seek a vote of confidence from his fractious Socialist party to push through a harsh austerity bill, as riot police battled tens of thousands of protesters in the heart of Athens.

Greece must pass the new campaign of tax rises and spending cuts to receive a new EU/IMF bailout and a 12 billion euro aid tranche that Athens needs to pay back debt that matures in August.

Euro zone officials, meanwhile, said a new three-year financing program for Greece may be delayed until next month due to differences over how to involve private investors.

The euro fell to $1.4154, lows not seen since May 27, before recovering a bit of ground to $1.4190, little changed from late Thursday levels, and finding support around its 100-day moving average.

A further test of the euro zone will come later in the day by way of a government bond auction in Spain, another country struggling with budget deficits, unemployment and social unrest.

Escalating tensions in the euro zone and data showing the U.S. economy is facing a troubling mix of weaker growth and higher prices triggered heavy selling on Wall Street, adding to pressure on Asian equity markets and other riskier assets on Thursday. <.N>

We have got used to fairly disappointing data from the U.S., so I think today's fall is mostly prompted mostly by euro zone problems, said Takashi Ohba, a senior strategist at Okasan Securities.

In Japan, the Nikkei <.N225> fell 1.1 0.9 percent, with growth-sensitive shares such Canon <7751.T> and Mazda Motor <7261.T> underperforming.

Other Asian markets also retreated, with the MSCI Asia ex-Japan index <.MIAPJ0000PUS> down 1.7 percent. Shares of materials and technology companies were among the weakest performers on fears of faltering global growth.

Hong Kong's Hang Seng Index <.HSI> fell through a key chart support at its March low, slumping 1.5 percent to its lowest level this year.

Foreign bearishness about Chinese equities, partly over corporate governance issues, have made investors increasingly cagey about the outlook for the Hang Seng with short-selling seeing a pick-up to levels last seen eight months ago.

In commodities markets, oil prices recovered in Asian trade after a more than 4 percent slide in the U.S. session as the rising dollar and signs of further economic weakness fed demand worries.

August Brent crude futures jumped $1.56, topping $114 a barrel, in the wake of a slightly recovering euro and a larger-than-expected draw in U.S. crude stocks.

Gold lost its footing on dollar strength.

Spot gold fell $3.32 an ounce to $1,526.5 an ounce after rising for a second straight session to around $1,533 on Wednesday as equity markets tumbled. Gold is well below a lifetime high around $1,575 touched in early May.

U.S. data later in the day includes housing starts, jobless claims and the Federal Reserve Bank of Philadelphia business outlook survey.

Japan