World stock markets were modestly lower on Monday as investors eye this week's Federal Reserve meeting for more clues about the strength of the US recovery.
A number of markets across Asia, including Japan's, were closed for holidays. Oil prices fell, while the dollar rose against the yen and the euro.
World markets posted more gains last week as U.S. Federal Reserve Chairman Ben Bernanke said recession in the world's largest economy was "likely over."
This week, investors will watch closely what the Fed has to say about the economy and the scale of the recovery after a two-day meeting that wraps up Wednesday. The Fed is widely expected to leave rock-bottom interest rates unchanged, though investors will be looking for clues in the central bank's statement about when hikes might start.
Christopher Wood, equity strategist for CLSA brokerage, says the easy money in the West made possible by the Fed and other central banks has helped propel Asian markets this year.
"The dollar is the new carry trade," Wood said in Hong Kong, referring to the practice of borrowing Japanese yen at a low cost to purchase risky and higher-yielding assets. "People are borrowing the dollar to buy equities and debt, primarily in emerging markets."
Early in Europe, Britain's FTSE 100 lost 0.4 percent, Germany's DAX fell 0.8 percent and France's CAC-40 dropped 0.3 percent.
In Hong Kong, the Hang Seng fell 150.60 points, or 0.7 percent, at 21,472.85 in back-and-forth trade, while South Korea's Kospi lost 0.3 percent to 1,695.50.
China's Shanghai benchmark was up 0.2 percent at 2,967.01 and Australia's benchmark shed 0.3 percent.
Japanese financial markets are closed Monday through Wednesday for public holidays. The markets will reopen Thursday. Financial markets in India, Indonesia, Malaysia, Philippines and Singapore were also closed Monday for holidays.
Asian markets have risen far more than most Western markets this year. Indonesia's main benchmark has surged over 81 percent, while India's Sensex is up nearly 74 percent. The Dow Jones index, by comparison, has gained 11.9 percent during that time.
Wood said Asian stocks would continue their heady rise because there was "an overwhelming probability that more and more money flows into Asia."
"The chief beneficiary of Western monetary easing won't be Western economies. It will be Asian asset prices (such as) equities and real estate," he said. "The longer-term risk is that Asia goes into a monstrous asset bubble which ultimately destabilizes" the region's economies.
Friday in New York, the Dow rose 36.28, or 0.4 percent, to 9,820.20, its highest close since Oct. 6, when it finished at 9,956.
The broader Standard & Poor's 500 index rose 2.81, or 0.3 percent, to 1,068.30, while the Nasdaq composite index advanced 6.11, or 0.3 percent, to 2,132.86.
Futures pointed to losses Monday on Wall Street. Dow futures were down 51, or 0.5 percent, at 9,682.
Benchmark crude for October delivery slipped 81 cents to $71.23 a barrel in Asian trade.
The dollar gained to 92.03 yen from 91.46 yen. The euro fell to $1.4641 from $1.4686