By Nichola Saminather
SINGAPORE (Reuters) - Asian stocks were mixed on Monday in thin trade, following Wall Street's declines and the G20's decision to drop a pledge to avoid trade protectionism, while the Federal Reserve's less hawkish-than-expected comments continued to weigh on the dollar.
European stocks are set for a subdued start, with financial spreadbetter IG Markets expecting Britain's FTSE 100 to open little changed and Germany's DAX to open 0.3 percent lower.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 percent.
Hong Kong's Hang Seng climbed 0.7 percent. Chinese shares were mixed with the CSI 300 down 0.1 percent while the Shanghai Composite added 0.1 percent.
Australian shares closed down 0.36 percent. South Korea ended the day 0.35 percent lower. Japan is closed for a holiday.
The MSCI emerging markets index added 0.4 percent to hit its highest level in more than two years on Monday.
Investor sentiment towards emerging markets, while cooling, remains positive. Emerging market equity funds had their sixth straight week of inflows in the week ending March 15, but the pace slowed. They had net inflows of $215 million, compared with nearly $1 billion the previous week, according to Thomson Reuters data.
On Friday, Wall Street was flat to negative, dragged lower by bank shares that fell along with Treasury yields.
Financial leaders from the world's biggest economies reiterated their warnings against competitive devaluations and disorderly foreign exchange markets at the meeting in the German town of Baden-Baden over the weekend.
But they failed to agree on a commitment to keep international trade free and open, highlighting a global shift towards protectionism.
On Sunday, German Chancellor Angela Merkel and Japan's Prime Minister Shinzo Abe defended free trade, calling for a trade deal to be reached quickly between Japan and the European Union and distancing themselves from protectionist rhetoric coming from the Trump administration.
"Essentially (the G20 outcome was) a result of the U.S. protectionist stance, something Trump has been very clear on and the market is well aware of this," said James Woods, global investment analyst at Rivkin Securities in Sydney.
"Importantly we saw other leaders such as Shinzo Abe and Angela Merkel come out publicly supporting free trade, and for now the protectionist stance remains constrained to the U.S. It would be more concerning if this began spreading to other countries."
The dollar didn't react to the statements from the meeting, hovering close to its near-three-week low touched on Friday. It traded almost 0.2 percent lower at 112.54 yen, its fourth straight day of declines after the Fed reiterated plans for three rate hikes this year, fewer than the four markets were expecting.
The dollar index, which tracks the greenback against a basket of six trade-weighted peers, slipped 0.1 percent to 100.17, after earlier touching a 5 1/2-week low.
Markets are focused on a raft of speeches by Federal Reserve officials this week, including Chicago's Charles Evans on Tuesday and Friday, Chair Janet Yellen on Thursday, Dallas's Robert Kaplan and Minneapolis's Neel Kashkari on Friday and New York's William Dudley on Saturday.
The euro climbed 0.2 percent to $1.0763, riding investor relief over the Netherlands election defeat of anti-European Union candidate Geert Wilders that boosted it to a near-six-week peak on Friday.
Attention now turns to the French election, with the first Presidential debate set to take place on Monday. Opinion polls show independent centrist Emmanuel Macron would lead far-right leader Marine Le Pen by a hair in first-round voting, before beating her in the run-off.
In commodities, oil prices continued their downward trend as OPEC supplies remained steady despite touted cuts and rising U.S. drilling contributed to concerns about a supply glut.
U.S. crude dropped almost 1 percent to $48.32 a barrel.
Global benchmark Brent fell 0.6 percent to $51.41.
The weaker dollar boosted gold, which rose 0.5 percent at $1,234.54 an ounce, after touching a two-week high earlier in the session.
(Reporting by Nichola Saminather; additional reporting by Saikat Chatterjee; Editing by Sam Holmes)
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