European markets opened lower on 3 March, and continued trading to the downside thereafter, as the prospect of a war in Ukraine weighed down on investor sentiment.
The Stoxx Europe 600 index opened 1.5% lower to 333.05.
Britain's FTSE 100 index opened 1.6% lower.
Germany's DAX 30 index opened 2.5% lower.
France's CAC 40 index opened 1.9% lower.
Spain's IBEX 35 was trading 1.83% lower after opening lower.
Italy's FTSE MIB was trading 1.48% lower after opening lower.
Russian stocks on the MICEX Index dropped 10% in morning trade and the dollar climbed to a record high against the Russian rouble, despite the Russian central bank's decision to hike interest rates by 150 basis points.
In Moscow trading, Sberbank tanked 9.8%. Moscow-listed shares of MegaFon dropped 7.5% while oil major Rosneft shed 6.5%.
Meanwhile, European firms with a large exposure to Russia too suffered declines on Monday morning. Carlsberg shed 4.8%.
Elsewhere, German retailer Metro's plans to launch an initial-public-offering of its Russian unit have been thrown into doubt over the Ukraine crisis fallout.
Metro shares fell by over 5% in early trading on the German mid-cap stock exchange to €28.50.
Russian troops now control strategically important Crimea, an isolated Black Sea peninsula region of Ukraine, where Moscow operates a naval base.
The US has said its top diplomat, Secretary of State John Kerry, will visit Kiev to show solidarity with Ukraine's interim leadership after Russian military advances sparked international condemnation.
Societe Generale Cross Asset Research said in a note to clients: "The Crimean reaction to the ousting of the Ukrainian government, the Russian response and the counter-response from the US/Europe, are the focus for markets. The weekend's events will be followed by a lot of uncertainty and further risk aversion as a diplomatic solution is sought.
"The market reaction suggests uncertainty but not fear that the crisis will spread much more widely. So far, the FX winner is the Yen, the losers are the Ruble, as well as PLN, HUF and TRY. These trends are likely to continue for now, despite the 150bp rate hike announced this morning by Bank Rossii."
"Russia is unlikely to back down in its support of the regional government in Crimea. The importance of Ukraine as a link in Europe's energy supply line and as the point where Russia and the European Union meet, makes the idea that either side just backs down hard to imagine, but equally, provides plenty of incentives to work towards a diplomatic solution.
"So this will take time, during which CEE currencies will remain vulnerable and the Ruble, almost 50% higher in real terms than it was a decade ago, will remain the most vulnerable," the French bank added.
UniCredit Research said in a note to clients: "Bank of Russia hiked interest rates today by 150 bps, bringing the key rate to 7.0%. The decision was accompanied with a short press-release saying that this is needed to prevent inflation and financial stability risks related to uncertainties and high volatility in financial markets.
"This decision is not likely to stop RUB depreciation, although it might help to make it less profitable. However, this is a strong negative signal for the real sector. Bank interest rates and non-interest conditions for lending will immediately tighten, putting downward pressure on lending and thus increasing business risks."
"This is materialising at a time when consumption is the primary driver of growth. At this stage, our growth forecast of 2% for Russia this year is too optimistic. Inflation is also likely to remain above target, bringing into question whether this rate hike will ultimately prove temporary," Unicredit added.
India's BSE Sensex was trading 0.77% lower on 3 March.
Hong Kong's Hang Seng ended 1.47% lower while the Shanghai Composite closed 0.92% higher.
The Japanese Nikkei 225 finished 1.27% lower while South Korea's Kospi finished 0.77% lower.
However, the Australian ASX ended 0.38% lower.
Asian stock markets outside mainland China traded lower on Monday as brewing instability in Ukraine and downbeat factory activity data from China pulled down investor sentiment.
Dismal data from a HSBC report on China's factory activity was the latest to signal a slowdown in the world's second-largest economy.
The final reading from HSBC released on Monday showed China's manufacturing activity dropped to a seven-month low of 48.5 in February from 49.5 in January, marking the third consecutive monthly decline. Government data released on 1 March had pointed out that China's factory activity growth slowed to an eight-month low in February.
In mainland China, an easing of cash rates and a stabilisation of the yuan ahead of the National People's Congress buoyed investor sentiment. Comments by the deputy governor of China's central bank, asking market players not to read too much into the yuan's recent volatility, also lent support to Chinese equities.
In Shanghai, defence stocks led the rally, following a violent attack at a railway station in Southwestern China that left 33 dead on 1 March.
Beijing Aerospace Changfeng shot up 8% while Hafei Aviation added some 4%.
Wall Street Mixed
On Wall Street, most indices finished higher on 28 February amid speculation over potential Russian intervention in the Ukraine.
The Dow finished up 49.06 points, or 0.3%, higher at 16,321.71. The index gained 4% in February.
The S&P 500 ended 5.16 points, or 0.3%, higher at 1,859.45, a record finish for the index. It added 4.3% in February.
After striking a 14-year high of 4,342.59, the Nasdaq ended 10.81 points, or 0.3%, lower to 4,308.11. The index added 5% in February.
Tim Radford, Global Analyst at Rivkin Securities said in a note to clients: "Global equities had a strong February, with the MSCI world index rising 4.81%, while the S&P 500 index ended the month similarly, rising 4.31%.
"Upside momentum is supporting stocks, but the latest geopolitical developments in the Ukraine and rising tensions between the western world and Russia may see an unwinding of recent buying momentum.
"However, it's still far too early to say how the situation in Ukraine will unfold. For one, the geopolitical landscape and the surrounding risks are fairly different to what we saw in Syria [in 2013].
"With the S&P 500 index hovering near all-time highs it won't take much for investors to lock in some short-term profits, with the emerging geopolitical crisis in Ukraine likely to lead to near-term profit taking," he said.