Investors in Europe and Asia on Monday struggled to build on last week's gains as profit-takers stepped in while traders' eyes turned towards the next release of key US jobs data.
Despite worries that an expected surge in economic activity will send prices soaring and force central banks to tighten monetary policy, a forecast-beating jump in US inflation was taken in stride.
The calm reaction marked a change from recent rounds, with benchmark 10-year Treasury yields, a key gauge of future interest rates, inching down slightly.
"There is likely more upside to go on the inflation scare front in the months ahead as base effects, the lagged impact of commodity price hikes and bottlenecks continue to feed through, but there are now a few more signs that it will be transitory," AMP Capital's Shane Oliver said.
Tokyo, Hong Kong, Sydney, Singapore and Manila dipped but there were gains in Shanghai, Seoul, Mumbai, Taipei, Jakarta, Bangkok and Wellington.
There was little reaction to figures that indicated growth in China's factory activity slowed slightly in May.
Paris and Frankfurt both showed drops of 0.6 percent at the close, while the markets in London and New York were shut for holidays.
The focus is now on a release of US jobs figures this week, which will provide a fresh update on the state of the world's top economy as it emerges from last year's pandemic-induced collapse.
Meanwhile, the OECD raised its global growth forecast for this year but warned that "many headwinds persist" as not enough Covid vaccines are reaching emerging economies. The club of rich nations now estimates global growth will expand by 5.8 percent, up from 5.6 percent previously.
Patrik Schowitz of JP Morgan Asset Management said: "It still feels like a market looking for direction in the face of uncertainty around the interplay between much-feared inflation and much-hoped-for growth recovery.
"There still seems an extended growth runway ahead as further regions around the globe get the Covid and vaccination situation under control -- nothing we're seeing is really challenging that expectation, although it will take time, especially across some of the major emerging market economies."
Oil prices edged up towards levels not seen since January 2020 before the pandemic hammered demand.
Crude traders are looking ahead to a meeting of OPEC and other major producers Tuesday where they will decide on whether or not to lift output as the world economy bounces back.
The oil market will also be looking for comments on the prospect of Iranian oil returning to the market if Tehran reaches a new nuclear agreement with global powers.
- Key figures around 1645 GMT -
Euro Stoxx 50: DOWN 0.8 percent at 4,037.27 points
Frankfurt - DAX: DOWN 0.6 percent at 15,421.13 (close)
Paris - CAC 40: DOWN 0.6 percent at 6,447.17 (close)
London - Closed for a holiday
New York - Closed for a holiday
Tokyo - Nikkei 225: DOWN 1.0 percent at 28,860.08 (close)
Hong Kong - Hang Seng Index: UP 0.1 percent at 29,151.80 (close)
Shanghai - Composite: UP 0.4 percent at 3,615.48 (close)
Pound/dollar: DOWN at $1.4207 from $1.4190 at 2030 GMT Friday
Dollar/yen: DOWN at 109.46 from 109.84 yen
Euro/dollar: UP at $1.2227 from $1.2197
Euro/pound: UP at 86.06 pence from 85.91 pence
West Texas Intermediate: UP 1.0 percent at $67.00 per barrel
Brent North Sea crude: UP 1.1 percent at $69.49 per barrel