Shares fall on Greece uncertainty

World stock markets fell on Tuesday as investors worried about Greece's ability to form a new government.

Alexis Tsipras, the leader of the left-wing Syriza bloc, is trying to form a coalition after the centre-right New Democracy party failed to do so.

If successful, Mr Tsipras has said he will tear up the terms of the EU-IMF bailout deal.

European indexes closed lower. London's FTSE 100 fell 1.8%, Germany's Dax shed 1.9% and France's Cac 40 dropped 2.8%.

In New York, the Dow Jones closed lower for the fifth straight day, down 0.6% to 12,932.

The euro also lost ground for the seventh day in a row, falling against the dollar to $1.30 and to 80.6 pence against the pound.

Mr Tsipras has three days to reach a coalition deal and has told the two major parties, New Democracy and Pasok, to end their support for the austerity terms if they want to take part.

"Greece's troubles will worsen if the job of forming a new government drags out and forces another round of elections," said Craig Erlam, an analyst at Alpari currency traders.

He also warned that Greece could run out of money in June without a government to negotiate the next tranche of its bailout.

Even with a Syriza-led coalition, Greece may not receive the next instalment if it does not stick to the austerity measures required by the EU and IMF.

If Greece were to run out of money, it risks having to leave the euro.