Worries about Greek sovereign debt and a potential spillover elsewhere rattled financial markets again on Monday, squelching a tentative recovery by both European shares and the euro.

Stock markets were generally lower, the euro lost its early gains and Wall Street looked set to open flat to lower down.

World equities were down 0.2%, with emerging markets off 0.5%. Japan's Nikkei earlier lost 1.1%.

The falls came despite efforts on European bourses to buck a three-day losing streak that culminated on Friday with a loss of 2.1% on Friday, the FTSEurofirst 300's largest daily fall in 11 months.

The European index was down 0.2%.

Investors have been generally shifting out of riskier assets as concern builds over Greece's financial woes and its potential to spread to other euro zone countries and even further out.

Bank of America Merrill Lynch encapsulated the concern in a note about Asia.

Monday's market losses came despite attempts by authorities to persuade markets that all will be well.

At a weekend G7 meeting, European finance ministers said they would make sure Greece delivered on its promises to slash its budget deficit by the end of 2012.

German Finance Minister Wolfgang Schaeuble was later quoted in a newspaper article on Monday saying that members of the Group of Seven industrialized nations were confident that the European Union will sort out Greece's debt problems.

The premium investors demand to hold Greek sovereign debt over core German paper rose after a Greek union said it could call a further strike.

The yield spread between 10-year Greek government bonds and benchmark German Bunds spiked to as much as 365 basis points, up from Friday's settlement close of 350 bps, before returning to stand little changed on the day.

The euro gyrated against the dollar after earlier gaining. It was trading around at multi-month lows.

The euro was flat at $1.3664, down 4.5% for 2010.

Benchmark euro zone government debt yields were flat to slightly higher.