Asian and European markets were mixed Monday following a strong end to last week on Wall Street as traders turned their attention to the Federal Reserve's latest policy meeting and earnings from corporate giants.

A strong reading on US and European manufacturing and services activity provided a positive catalyst for investors, who appear to have got over President Joe Biden's plan to almost double capital gains tax, while Washington's decision to resume using Johnson & Johnson's vaccine also boosted optimism.

However, the president's $2.25 trillion infrastructure plan could take longer to get through Congress than hoped after a member of Biden's own party opposed the size of it and backed a slimmed-down version put forward by Republicans.

Joe Manchin's stance could leave the Democrats struggling to pass the plan through the Senate owing to their wafer-thin majority. "It appears an infrastructure bill appears some way off, as too does further spending plans this side of the mid-term elections in 2022," said National Australia Bank's Tapas Strickland.

Asian traders started the day on a strong note but struggled in some markets to hold morning gains, with Tokyo, Seoul, Singapore, Taipei, Manila and Bangkok all up but Hong Kong, Shanghai, Sydney and Jakarta falling.

London and Paris were slightly lower in early trade, though Frankfurt ticked higher.

Still, trading floors remain on edge over spiking virus infections around the world, with India seeing five straight days of more than 300,000 new cases in a surge that has overwhelmed hospitals and left severe oxygen and medicine shortages. However, Mumbai rose more than one percent Monday.

OANDA's Jeffrey Halley said: "India's situation dominated the weekend press, but across Japan, South Korea and Thailand and others in between, Covid-19 is undermining confidence in cyclical recovery" many had priced into their outlooks for the second half of the year.

This week sees Fed officials hold their next meeting on monetary policy, with its statement pored over for an idea about plans for the future as the world's top economy continues its strong recovery. Growth data for the first quarter is also due on Thursday.

Earlier this year there had been a fear that the strong global recovery, vaccinations and easing of lockdowns could send inflation surging and force the central bank to lift interest rates earlier than previously flagged. However, those concerns appear to have subsided for now with Treasury yields -- a key gauge of future rates -- easing back from their recent highs.

"Treasury yields have declined a little bit, they've taken back rate hikes in the future and we can't really expect the Federal Reserve or other central banks to lift off so quickly, so soon given the uncertainty about the pandemic", Ben Emons at Medley Global Advisors, told Bloomberg TV.

Investors are also keeping an eye on earnings reports from Wall Street giants including Tesla, Facebook and Apple, with Emons adding: "If we are going to see big jumps in earnings growth for these companies this week, then I think it's a positive backdrop for the markets."