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.

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 that of 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.

– Key figures around 0710 GMT –

Tokyo – Nikkei 225: DOWN 1.0 percent at 28,242.21 (close)

Hong Kong – Hang Seng: UP 1.01 percent at 28,862.77 (close)

Shanghai – Composite: UP 0.8 percent at 3,596.22 (close)

Euro/dollar: UP at $1.2080 from $1.2074 at 2200 GMT on Friday

Dollar/yen: DOWN at 103.71 yen from 103.86 yen

Pound/dollar: DOWN at $1.3567 from $1.3587

Euro/pound: UP at 89.04 pence from 88.86 pence

West Texas Intermediate: DOWN 0.3 percent at $52.18 per barrel

Brent North Sea crude: DOWN 0.5 percent at $54.83 per barrel

New York – Dow: DOWN 0.6 percent at 30,814.26 points (close)

London – FTSE 100: DOWN almost 1.0 percent at 6,735.71 (close)