LONDON/HONG KONG,  — Global equity markets presented a split picture on Monday, with UK and European bourses suffering sharp declines following escalating tensions between Britain, Europe and the United States over U.S. President Donald Trump's plans to seize Greenland.

In contrast,  several Asia-Pacific indices posted solid gains. Trading occurred in the absence of direction from Wall Street, as U.S. stock and bond markets were closed in observance of Martin Luther King Jr. Day.

European markets were firmly in negative territory. The pan-European EURO STOXX 50 index led the losses, dropping 1.72 percent to close at 5,925.82. France's CAC 40 was a major laggard, falling 1.78 percent to 8,112.02. Germany's DAX declined 1.34 percent to 24,959.06, and the broad Euronext 100 Index fell 1.82 percent to 1,754.66.

The UK's FTSE 100 showed relative resilience but still ended lower, dipping 0.39 percent to 10,195.35. Belgium's BEL 20 finished down 1.25 percent at 5,290.10.

Meanwhile, the Asia-Pacific region saw broad-based strength. Australia's benchmarks were standout performers: the S&P/ASX 200 surged 1.67 percent to 8,874.50, and the ALL ORDINARIES index jumped 1.77 percent to 9,194.90. South Korea's KOSPI Composite rose 1.32 percent to 4,904.66.

Other Asian markets also advanced. Taiwan's TWSE Index gained 0.73 percent to 31,639.29, while Indonesia's IDX COMPOSITE added 0.64 percent to 9,133.87. China's SSE Composite Index edged up 0.29 percent to 4,114.00.

The performance was mixed elsewhere in Asia. Japan's Nikkei 225 bucked the regional trend, falling 0.65 percent to 53,583.57. Hong Kong's Hang Seng Index declined 1.05 percent to 26,563.90. India's S&P BSE SENSEX slipped 0.39 percent to 83,246.18.

In other global action, Canada's S&P/TSX Composite managed a modest gain of 0.15 percent to 33,090.96. New Zealand's S&P/NZX 50 fell 0.61 percent to 13,580.29, and Singapore's STI Index dipped 0.29 percent to 4,834.88.

Analysts noted that the subdued and fragmented trading was characteristic of a session lacking the gravitational pull of the U.S. market. "With Wall Street closed, European markets lacked a positive catalyst and focused on local concerns, while parts of Asia found support from regional economic data," commented a strategist in Hong Kong.

Attention now turns to Tuesday's open, when U.S. participants will return to the market and provide fresh direction for global equities.

FOREX UPDATE: U.S. Dollar Weakens Broadly as Risk Sentiment Improves

The U.S. dollar traded lower against most major currencies to start the week, as tensions between the United States, Europe and the U.K. rose following threats by U.S. President Donald Trump to impose tariffs on a number of European countries and the UK over his plans to seize Greenland  prompted investors to move out of the greenback.

The euro was a notable gainer, with the EUR/USD pair rising 0.42 percent to 1.1643. The British pound also advanced, with GBP/USD climbing 0.38 percent to 1.3426. The commodity-linked Australian and New Zealand dollars led the charge, with AUD/USD jumping 0.54 percent to 0.6715 and NZD/USD surging 0.79 percent to 0.5794.

The dollar's losses were pronounced against the Swiss franc, traditionally a safe-haven asset. The USD/CHF pair fell 0.57 percent to 0.7975. It also lost ground against the Canadian dollar, with USD/CAD dipping 0.32 percent to 1.3868, supported by stable oil prices.

The one exception to the dollar's weakness was against the Japanese yen. The USD/JPY pair held steady, inching up a marginal 0.04 percent to 158.13, as the yen's own low-yield status limited its appeal.

Analysts suggest the dollar's broad-based decline reflects growing confidence that the US rate-hiking cycle has conclusively ended, with markets now focused on the timing of the next rate cut. This outlook has reduced the dollar's interest rate advantage and spurred flows into other currencies.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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