BANGKOK, Thailand (AP) -- Asian and European markets fell Monday after Wall Street tumbled late last week on concerns over a slowdown in the U.S. economy and the outlook for corporate profits.

World markets fall on Wall Street downturn.A pedestrian walks past an electronic stock indicator in Tokyo, Japan, on Monday.

Japan's Nikkei 225 index fell 3.1 percent to close at 12,917.5 and Hong Kong's Hang Seng index fell 3.5 percent to 23,811.2, while Asia's biggest declines came in China -- where the Shanghai Composite Index plunged 5.6 percent and the Shenzhen index lost 6.3 percent.

Meanwhile, in Europe, Britain's FTSE-100 was down 1.08 percent by 1620 GMT, France's CAC 40 fell 0.66 percent and Germany's DAX slipped 0.74 percent.

The U.S. markets had slight initial falls following Wachovia's unexpectedly large first-quarter loss of $393 million, tainted by exposure to credit markets. The fourth-largest U.S. bank said it would cut its dividend by 41 percent to 37.5 cents per share, and it planned to raise $7 billion from sales of preferred shares.

The Dow Jones industrial average was down 0.11 percent at the 12,311 by 1620 GMT after falling 2 percent on Friday. The Standard & Poor's 500 index was down 0.27 percent at 1,329 and the Nasdaq fell 0.41 percent at 2,281.

In London, mining and oil shares led the index lower as metal prices fell. BP was down 0.3 percent, Royal Dutch Shell dipped 0.9 percent and Cairn Energy dropped 3.8 percent.

In Japan, the focus was on financial shares. Analysts said the Nikkei was set to pull back due to worries over earnings from U.S. banks and high-tech companies. Investors are also waiting for U.S. economic data for March, including retail sales and the consumer price index.

Nomura Holdings dropped 4.9 percent, Mitsubishi UFJ Financial Group fell 3.7 percent and Sumitomo Mitsui Financial Group shed 4.2 percent.

High-tech shares were dragged down by a Nikkei report that said Canon's net profit for the January-March quarter was likely to fall 16 percent due to a rising yen. Canon slid 4.9 percent, Sony fell 4.5 percent and Nikon dropped 4.6 percent.

In China and Hong Kong, property developers and other blue chips also fell on fears that authorities may further tighten credit to combat inflation.

On the Shanghai exchange, property sector leader China Vanke and Poly Real Estate Group both fell by the daily 10 percent limit. Market heavyweight PetroChina fell 3.3 percent.

Banks and insurers were also hit by selling in China's largest city. Shenzhen Development Bank lost 10 percent, Industrial & Commercial Bank of China slipped 5.2 percent and Ping An Insurance shed 6.6 percent.

Analysts said losses in Hong Kong were milder than those on mainland bourses, because fund houses took advantage of lower share prices to return to the market.

"Locally the underlying sentiment is much firmer (than overseas). A lot of funds will be eyeing a market pullback as a chance to get in," ICEA Securities Ltd. strategist Ernie Hon told Dow Jones Newswires.

Among Chinese developers listed in Hong Kong, China Overseas Land dropped 5.6 percent, Shimao Property fell 7.3 percent and Guangzhou R&F Properties tumbled 11.4 percent.

Analysts and traders said they expected the index to trade in a narrow range for the remainder of the week.

China will report first-quarter gross domestic product data Wednesday, and will also issue other economic indicators.

DBS Group Research said China's economy likely grew at a slower pace in the first quarter, rising 10.5 percent from a year earlier. China's GDP has been growing in access of 11 percent, and last week, the government raised its estimate of 2007 growth to 11.9 percent from the previous estimate of 11.4 percent.

The U.S. will also report retail sales later Monday and initial jobless claims data Thursday. DBS expected both figures to decline, showing a slight economic slowdown.

Elsewhere in Asia on Monday, Australia's market fell 1.8 percent and South Korea's key index sank 1.9 percent. In Singapore, the Straits Times Index fell 2.7 percent.

Markets were closed in India, Vietnam and Thailand for public holidays.