By  Lawrence White

A stock quotation board is reflected on window glasses at a building in Tokyo, Japan December 11, 2025. REUTERS

(Reuters) - European shares moved higher on Monday as Wall Street futures pointed to a recovery from last week's sell-off, but investor caution capped gains at the start of a week loaded with big central bank decisions and economic data.

Europe's benchmark STOXX index of 600 large companies (.STOXX) gained 0.6%. S&P 500 e-mini futures rebounded 0.4%, after U.S. stocks had slumped on Friday over concerns about a bubble in Artificial Intelligence shares and lingering inflation in the world's biggest economy.

Asia shares were less buoyant thanks to renewed worries in China's property market. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) shed 1.2%, led by a drop of as much as 2.7% in South Korean shares (.KS11), one of the world's best-performing markets this year.

"The risk-off tone across Asia looks more like a spillover from last Friday’s selloff in U.S. momentum and tech than a region-specific catalyst," said Marc Velan, head of investments at Lucerne Asset Management in Singapore.

"The unwind in the AI-capex trade weighed on global risk appetite, and in thin year-end liquidity those moves tend to travel quickly across regions."

The yield on the U.S. 10-year Treasury bond was last down 3 basis points at 4.1645% as investors awaited a string of economic data releases and a slew of decisions from central banks.

CHINA PROPERTY WOES

Against the Chinese yuan trading offshore , the U.S. dollar slipped 0.1% to 7.0486 yuan, hovering around its strongest level in more than a year, after factory output and retail sales data slowed further in November.

Official data showed on Monday that new home prices extended a decline in November, indicating that a recovery in demand remains elusive despite the government vowing to stabilise the sector.

China Vanke (000002.SZ) said it would convene a second bondholder meeting, after the state-backed property developer failed to secure bondholder approval to extend by one year a bond payment falling due Monday, increasing the risk of default and renewing concerns about the crisis-hit property sector.

"If Vanke ultimately defaults, we think the ramifications on the China property sector can be significant," said Jeff Zhang, equity analyst at Morningstar. "Investors may be more concerned about the balance sheet and government's attitude towards bailout for even the 'safe names'."

CENTRAL BANK DECISIONS LOOM

Among the central banks making decisions this week, the Bank of Japan is expected to hike rates by 25 basis points to 0.75%, while the Bank of England may make an equal-sized cut to 3.75%.

The European Central Bank is expected to keep interest rates on hold, alongside Sweden's Riksbank and Norway's Norges Bank.

Investors will also have the chance to catch up on economic data that was delayed by the U.S. government shutdown, including the jobs report for November and the monthly consumer price index.

"It's worth taking this week’s data with a pinch of salt given problems collecting data as well as the direct economic impact of the government shutdown," said Ben Bennett, head of investment strategy Asia at L&G Asset Management in Hong Kong.

"We'll have to wait until 2026 to get a clearer reading on the U.S. economy."

In Japan, stocks gained some support after the BOJ's closely watched "tankan" survey showed on Monday that big manufacturers' business sentiment hit a four-year high, suggesting the economy was weathering the hit from higher U.S. tariffs.