The euro slid on Tuesday as Germany demanded painful new austerity measures from Greece in return for badly needed financial aid, while Asian stocks fell as investors took profits in sectors that have been outperforming in recent weeks.

Greece could become the first euro zone country to be bailed out because of its weak finances, having already asked the International Monetary Fund and European Union for 45 billion euros to survive.

But investors have begun to wonder if that amount is enough to avert a Greek default and if other countries with high debts and low growth could fall like dominoes, jeopardizing Europe's economic recovery and threatening financial markets.

For now, the situation is viewed as a European affair, with asset markets outside Europe largely unfazed by the intense selloff in not just Greek but Portuguese bonds overnight.

Many investors are still more focused on solid signs of global recovery, which were underlined by strong earnings reports and sales forecasts from heavy machinery maker Caterpillar Inc and appliance maker Whirlpool Corp overnight. <.N>

But traders are keeping a watchful eye on Athens, which needs to pay back or refinance 9 billion euros of debt by May 19.

The Greek situation is looking very shaky indeed and the clock is ticking, said Robert Rennie, chief currency strategist at Westpac Bank in Sydney.

Technically, the $1.34-1.3450 area (for the euro) is very crucial and a break above that level will mean the euro will start looking better in the short term.

* Euro falls 0.2 percent to $1.3368 after not being able to secure a hold above $1.34. Buying of euros against yen by institutional investors appeared to dry up just below 126 yen. The euro was down 0.4 percent to 125.38 yen.

* The Australian dollar slipped 0.2 percent to $US0.9253, falling as selling in Chinese equity markets accelerated.

* Japan's Nikkei share average fell 0.4 percent <.N225>, hurt by weakness in staples and other domestic-oriented industries. Exporter stocks such as Sony <6758.T> were outperforming the broad market.

* The MSCI Asia Pacific index of stocks outside Japan was down 0.7 percent, led by the utilities and healthcare sectors.

* The Shanghai composite <.SSEC> was down 2 percent to the lowest since early February, leading losses among indexes in the region. Property-related shares were hurt by a steady drumbeat of government measures to cool down the housing market.

* Shares of China Construction Bank <0939.HK> were down 1.9 percent in Hong Kong after a report said the world's second-biggest bank by market value may raise up to 70 billion yuan ($10.25 billion) in new shares in Shanghai and Hong Kong.

* U.S. stocks edged lower overnight as bank shares fell on fears that financial reforms would curb profits, though losses were capped by strong company results.

* U.S. crude futures were down 0.7 percent to $83.63 a barrel, ahead of U.S. oil stockpiles data expected to show soft demand in the world's top oil consuming nation.

(Additional reporting by Anirban Nag in SYDNEY)

(Editing by Kim Coghill)