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At the close of trade in Europe, London's benchmark FTSE 100 index was down 0.8 per cent compared with Friday.
In the eurozone, Frankfurt's DAX 30 shed 0.7 per cent and the Paris CAC 40 lost 0.9 per cent.
On the other side of the Atlantic, New York's the Dow - which ended last week on a fresh record high - was showing a mid-session loss of 0.6 per cent.
Earlier in Asia, Tokyo's Nikkei stocks index closed down 0.8 per cent as investors cashed in ahead of the New Year holidays, but the final day of trading still saw the benchmark end up 18.2 per cent from a year earlier.
"Investors appear to be growing a tad apprehensive about chasing the record-setting US equity market ... into year-end," said AxiTrader market strategist, Stephen Innes.
OANDA analyst Edward Moya described trading as "light" but said that "expectations remain in place for US stocks to continue march higher" at the start of 2020.
The US Federal Reserve "has clearly signalled they will not be tightening anytime soon, the US consumer continues to impress, and as fears of both a complete collapse with global trade talks and Brexit have abated," he said.
Briefing.com analyst Patrick O'Hare similarly believed that the declines seen on Monday would not undo the strong rally of recent weeks.
These past few weeks were "a terrific turn in a terrific quarter (+8.8 per cent) that is ending a terrific year," he said.
Analysts attribute the successive series of US records to upbeat investor sentiment based on a lower risk of recession in the immediate future, a mellowing of US-China trade tensions, and accommodative monetary policy.
In Asia, investors will be watching for key policy announcements in the region later this week.
North Korean leader Kim Jong Un is set to give his New Year's speech on Wednesday, with all eyes on nuclear-armed Pyongyang's threat of a "new way" after its end-of-year deadline for sanctions relief from the US, analysts said.
Chinese President Xi Jinping is also scheduled to give a New Year's address.
Key figures around 1645 GMT:
London - FTSE 100: DOWN 0.8 per cent at 7,587.05 points (close)
Frankfurt - DAX 30: DOWN 0.7 per cent at 13,249.01 (close)
Paris - CAC 40: DOWN 0.9 per cent at 5,982.22 (close)
EURO STOXX 50: DOWN 0.9 per cent at 3,749.20
Tokyo - Nikkei 225: DOWN 0.8 per cent at 23,656.62 (close)
Hong Kong - Hang Seng: UP 0.3 per cent at 28,319.39 (close)
Shanghai - Composite: UP 1.2 per cent at 3,040.02 (close)
Euro/dollar: UP at US$1.1217 from US$1.1177
Dollar/yen: DOWN at 108.84 yen from 109.11
Pound/dollar: UP at US$1.3135 from US$1.3118
Euro/pound: UP at 85.40 pence from 85.36 pence
Brent Crude: DOWN 0.7 per cent at US$66.34 per barrel
West Texas Intermediate: DOWN 0.6 per cent at US$61.38 per barrel