Most markets fell Monday as investors took a breather following a recent rally, though Hong Kong and Shanghai enjoyed gains after data showed China's economy grew more than expected last year.

While broadly welcomed on trading floors, Joe Biden's $1.9 trillion stimulus proposal was unable to fuel fresh gains with the spending spree largely factored into prices, while analysts warned it could be watered down by the time it reaches his desk for signing.

Concern about a frightening spike in new virus cases was also keeping a lid on buying sentiment as governments are forced to impose fresh lockdowns while battling to roll out vaccines.

However, the general consensus remains upbeat for the long-term outlook.

"Markets needed a breather or even a pull back to justify reflationary expectations," Ben Emons, at Medley Global Advisors, said.

Tokyo, Sydney, Seoul, Singapore, Taipei, Mumbai and Wellington led losses following a negative lead from Wall Street.

"After the early week exuberance of the first week of 2021, investor appetite for risk has taken a little bit of a knock in the last week or so, largely down to concerns that the recovery story being priced in may well be a little premature," said Michael Hewson at CMC Markets.

"It probably hasn't helped that expectations of a shock and awe Democrat fiscal plan, are also starting to get pared back a touch as well, as details of the new $1.9trn fiscal aid plan start to come into clearer focus."

However, stocks in Hong Kong and Shanghai rose after official figures showed China's economy expanded a forecast-beating 2.3 percent last year. While the reading was the weakest in four decades, it showed growth was picking up again after a devastating start to 2020 as swathes of the country were shut down to contain the deadly coronavirus.

London, Paris and Frankfurt opened with losses.

Focus will now turn to Biden's inauguration on Wednesday and hopes that his massive spending plan can get through Congress, with worries that a Senate impeachment trial of Donald Trump could snarl up its progress as well as cabinet confirmation hearings.

But Axi strategist Stephen Innes said: "The final package will ultimately be pared down significantly, which is adding a touch of uncertainty to the view."

And National Australia Bank's Rodrigo Catril added: "The underwhelming market reaction to Biden's stimulus plan reflects the reality that at this stage this is just a proposal that needs to find support in Congress, potentially requiring time, a few political debates and several pieces of legislation."

He said traders were also concerned that the president-elect had hinted at possible tax hikes to pay for the government's largesse.

Biden has already said he wants to lift corporate tax rates and taxes paid by individuals earning more than $400,000 a year.