After Wall Street's muddled performance on Friday and with US markets closed Monday for a holiday, traders turned their attention to some grim Asian economic news.
Japan's economy suffered the worst quarterly contraction in more than five years, while Singapore cut its growth forecast for 2020 as the virus batters the city-state's tourism and trade.
That comes after Europe's largest economy Germany on Friday reported zero growth in the last quarter of 2019 and warnings from the International Monetary Fund that the virus could damage global economic activity this year.
The euro on Monday hit a near three-year low at $1.0822 in Asian trading hours, before recovering.
"The European Commission is assuming 1.2 percent growth across euro-area in 2020 but markets appear to be less optimistic," said Jasper Lawler, head of research at traders LCG.
As for China, while investors are comforted by a slowdown in new infections outside hardest-hit Hubei province in recent days, they might be less sanguine if the country's economy takes a worse-than-expected hit, said Stephen Innes of AxiCorp.
"If it comes out bad enough for confidence to plummet, investors could quickly find themselves up the creek... without a paddle," he said.
"Financial markets are not known for their rational thinking lately and given the 500 million or so mainlanders affected by the (COVID-19) quarantine... it's also not hard to come up with more downside risks than upside ones right now," Innes added.
A spokesman for China's national health authority said the slowdown was a sign the outbreak was being controlled.
However, World Health Organization chief Tedros Adhanom Ghebreyesus has warned it is "impossible to predict which direction this epidemic will take".
Tokyo's benchmark Nikkei 225 index closed down 0.7 percent after the Japanese economy shrank 1.6 percent in the three months to December from the previous quarter, even before the novel coronavirus outbreak in China hit Japan, official data showed.
Mainland China's benchmark Shanghai Composite Index closed up 2.3 percent after the central bank announced measures aimed at cushioning the economy against the health crisis.
On Monday, the People's Bank of China offered 200 billion yuan ($29 billion) of one-year medium-term loans at a 3.15 percent interest rate, 10 basis points lower than previously.
It also added 100 billion yuan to money markets through reverse repurchase agreements.
Wanlong Securities said the central bank's steps amounted to an "interest rate cut in disguise".
"The market got a boost from these supportive measures," it said in a client note.
London - FTSE 100: UP 0.4 percent at 7,437.65 points
Frankfurt - DAX 30: UP 0.2 percent at 13,766.29
Paris - CAC 40: UP 0.2 percent at 6,081.71
EURO STOXX 50: UP 0.2 percent at 3,849.67
Shanghai - Composite: UP 2.3 percent at 2,983.62 (close)
Hong Kong - Hang Seng: UP 0.6 percent at 27,975.57 (close)
Tokyo - Nikkei 225: DOWN 0.7 percent at 23,523.24 (close)
New York - Dow: DOWN 0.1 percent at 29,398.08 (close)
Euro/dollar: UP at $1.0844 from $1.0831 Friday
Pound/dollar: DOWN at $1.3017 from $1.3047
Euro/pound: UP at 83.31 pence from 83.01 pence
Dollar/yen: UP at 109.87 from 109.78
Brent Crude: DOWN 0.1 percent at $57.26 per barrel
West Texas Intermediate: FLAT at $52.07 per barrel