Most markets rose Monday but investors traded cautiously as they awaited key US inflation data and the Federal Reserve's interest rate decision later this week.
Stocks globally have enjoyed a broadly strong run-up this month on hopes the US central bank will decide against an eleventh successive hike at the end of the meeting on Wednesday.
Positive readings on jobs in the past few weeks -- indicating the economy remained healthy but gave the Fed room to stand pat in June -- have added to the broadly upbeat mood.
However, with the policy board split on the best way forward for fighting still-too-high inflation, there remains a certain amount of uncertainty on trading floors.
The decision comes a day after the release of consumer price inflation data, which could play a major role in officials' thinking.
For now, the forecast is for the Fed to hold this month but announce another hike in July.
"With inflation still well over double the target rate for all central banks can the US Federal Reserve really afford the luxury of a pause, or are they right to be careful given the deflation coming out of China," said CMC Markets' Michael Hewson.
"Growth is already slowing in China post covid, and in Europe, Germany and the EU are already in a technical recession, while the UK probably isn't too far behind."
Policy announcements from the central banks of Japan, China and the eurozone are also due this week, after Canada and Australia unveiled small increases last week.
Meanwhile, concern about China's sluggish recovery and signs of further weakness in Europe continued to weigh on sentiment.
After a positive but light lead from Wall Street -- with the S&P 500 extending its bull market run -- Asian traders battled to build on last week's advances.
Tokyo, Hong Kong, Mumbai, Singapore, Jakarta and Taipei rose but Shanghai, Seoul, Bangkok and Wellington dipped.
London, Paris and Frankfurt rose in the morning.
Solita Marcelli, of UBS Global Wealth Management, warned against thinking the latest gains for equities could be the beginning of a rally.
"While many investors believe that passing this milestone puts markets in bull territory, it remains possible that we are seeing a bear market rally -- a period of strong gains that occurs in the middle of a bear market," she said.
"Until markets reach a new all-time high, it's impossible to know whether the bear market trough -- the ultimate low of the market cycle -- is behind us."
And Mike Riddell, of Allianz Global Investors, said that while the US economy appeared to still be holding up, there was a possibility of a "nasty recession" before the year's end owing to numerous rate hikes.
"Our base case is for a moderate-to-deep recession -- and potentially crises -- as the unprecedented pace of global policy tightening seen over the last year starts to really bite."
Worries about a possible recession -- as well as China's weakness -- and the impact that could have on demand weighed on oil prices Monday, extending Friday's losses of more than one percent for both contracts.
The drop came even after Saudi Arabia's surprise decision last weekend to cut output by a million barrels a day next month, and possibly for longer.