Europe equities rose on Monday in light pre-Christmas trade with many traders away for the festive break, rebounding gently from last week's losses that followed bumper interest rate hikes.

"We really don't have much volume in markets as traders are away for holidays," AvaTrade analyst Naeem Aslam told AFP. "Markets are grinding higher as some traders are optimistic about valuations which seem to them somewhat attractive."

Heading into the afternoon, London rose 0.5 per cent, while Frankfurt and Paris each won 0.4 per cent in value.

"Overall I think it's going to be pretty subdued trading, given the lack of significant data to react to," noted analyst Susannah Streeter at stockbroker Hargreaves Lansdown.

Asian indices however fell on lingering concern over a possible global recession caused by moves to fight inflation from top central banks.

Equities took a turn south last week after monetary policymakers around the world signalled that while price rises appeared to be stabilising, more work would be needed to get them under control.

All three main indexes on Wall Street ended sharply lower on Friday after the Federal Reserve warned it would continue tightening monetary policy into 2023. That was followed by similar warnings from the European Central Bank and Bank of England, while data suggested economies were feeling the pinch, dealing a blow to sentiment heading into the Christmas break.

"With no shortage of economic headwinds, investors struggle to find something cheerful about this holiday week after the two most dominant central banks cast a pall over the proceedings," said SPI Asset Management's Stephen Innes.

The US sell-off fed through to Asia, where Tokyo shed more than one per cent, while Hong Kong, Shanghai, Taipei, Manila, Bangkok, Jakarta and Wellington were in negative territory, but Singapore and Mumbai edged up.

Adding to the downbeat mood was a spike in COVID-19 cases in China following the country's reopening after almost three years of strict containment measures

Adding to the downbeat mood was a spike in COVID-19 cases in China following the country's reopening after almost three years of strict containment measures. While the move is expected to boost the world's number two economy, there is a worry that businesses and China's health system will be hit in the near term. Still, Beijing flagged a number of measures aimed at kickstarting growth next year, including support for the beleaguered property sector.

An expected pick-up in Chinese demand helped propel oil prices moderately higher.