World equities wobbled Monday after G20 finance ministers failed to renew a longstanding anti-protectionist pledge in the face of US President Donald Trump's "America First" push.
Markets in much of Asia and Europe beat a retreat as investors took profits from last week's bumper gains and swapped risky equities for safer assets. Wall Street stocks finished mostly lower.
Over the weekend, in an early taste of what Trump's presidency spells for the world, the G20 failed to get Washington to sign off on a pledge to reject protectionism in a closing statement, a pledge which had been a usual feature of the G20 since the start of the global financial crisis.
Commitments of support to the existing multilateral trade system, including the World Trade Organization (WTO), were also conspicuously missing from the final communique from the meeting of finance ministers and central bankers from the 20 major economies held in the German spa town of Baden-Baden.
"The European equity markets started the week on a heavy risk-off sentiment after the G20 communique explicitly reflected the US intentions to establish trade protectionist measures," said London Capital Group analyst Ipek Ozkardeskaya.
The move follows Trump's warnings to impose levies and revise trade agreements he says are unfair to the United States.
- 'More aggressive' -
Citi analyst Ebrahim Rahbari argued in a note to clients that rising protectionism posed a key risk to the world economy.
"Overall, we continue to think that the new US administration will pursue a more aggressive position on international trade," Rahbari said.
"We see a continuation of the gradual rise in protectionism in recent years and for globalization to stall, but we see a major rise in protectionism -- including the risk of trade wars -- as one of the main risks to the global outlook."
In London, the pound took a small hit, initially dropping around half a cent, after the British government announced it would begin the two-year procedure to exit the European Union on March 29.
In Zurich, Swiss banking giant UBS saw its share price slide 0.9 percent to 15.89 Swiss francs.
Legal sources told AFP on Monday that UBS will go on trial in France for establishing a wide-ranging tax fraud scheme worth nearly 10 billion euros.
UBS will be charged with illegal banking practices and dissimulating tax fraud, the sources said, adding that UBS's French subsidiary also will also go on trial for complicity.
US bank shares also were under press on doubts Washington will be able to enact regulatory relief for the sector anytime soon.
Wells Fargo was among the hardest hit, losing 1.8 percent after disclosing that new credit-card applications in February fell 55 percent from the year-ago period, the latest drag from a fake accounts scandal that has roiled the bank.
- Key figures around 2100 GMT -
New York - Dow: DOWN less than 0.1 percent at 20,905.86 (close)
New York - S&P 500: DOWN 0.2 percent at 2,373.47 (close)
New York - Nasdaq: UP less than 0.1 percent at 5,901.31 (close)
London - FTSE 100: UP 0.1 percent at 7,429.81 (close)
Frankfurt - DAX 30: DOWN 0.4 percent at 12,052.90 (close)
Paris - CAC 40: DOWN 0.3 percent at 5,012.16 (close)
EURO STOXX 50: DOWN 0.2 percent at 3,440.76
Hong Kong - Hang Seng: UP 0.8 percent at 24,501.99 (close)
Shanghai - Composite: UP 0.4 percent at 3,250.81 (close)
Tokyo - Nikkei 225: Closed for holiday
Euro/dollar: UP at $1.0746 from $1.0735
Pound/dollar: DOWN at $1.2358 from $1.2392
Dollar/yen: DOWN at 112.50 from 112.71 yen
Oil - West Texas Intermediate: DOWN 56 cents at $48.22 per barrel
Oil - Brent North Sea: DOWN 14 cents at $51.62 per barrel