LONDON -  Europe's major equity markets gave up their earlier modest gains on Tuesday as stocks on Wall Street slid over the emerging immigration and trade policies from the administration of US President Donald Trump.

Controversy over Trump's divisive executive order to ban refugees and citizens of seven mainly Muslim countries had already sent markets into a tailspin on Monday. But after recovering modestly earlier on Tuesday, European markets headed lower again later, pulled down by a weaker opening in New York.

Then Trump economic advisor Peter Navarro on Tuesday bashed Germany for allegedly exploiting an undervalued euro to take advantage of its trading partners. "Although some of the selling momentum experienced yesterday throughout the stock markets has cooled down, the market headlines across the globe continue to be dominated by the executive order from Donald Trump," noted FXTM analyst Jameel Ahmad.

"There is no doubting that this move from Trump has caused outrage across the globe and such actions represent a risk to the market sentiment," he warned.

Investors were also shying away from taking bets ahead of the rate-setting meeting of the US Federal Reserve later this week, analysts said.

"European markets attempted to stage a rebound, but gave in to timidity ahead of the Fed decision," said strategists at the brokerage Aurel BGC.

The Federal Open Market Committee (FOMC) will announce the outcome of its first policy-setting of the year on Wednesday.

Trump's executive order suspends the arrival of all refugees for a minimum of 120 days, Syrian refugees indefinitely and bars citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for 90 days.

The resulting global outrage spooked investors, who fear the announcement could be a sign the tycoon will press ahead with many of his protectionist promises, overshadowing economy-boosting measures such as infrastructure spending and tax cuts -- which had fuelled a rally in November and December.

"Trump is proving to be even more erratic and unpredictable than many feared," noted XTB analyst David Cheetham.

All three main Wall Street indexes ended lower in Monday trade, while London, Paris and Frankfurt each lost around one percent.

The sell-off spread to Asia, with Tokyo ending 1.7 percent lower on Tuesday, while Hong Kong and Shanghai were closed for holidays.

Friday's order was the latest controversial move by Trump in his first week, which also included a row with Mexico over trade and his proposed border wall, battles with the media over the crowd size at his inauguration and unsupported assertions that millions of people voted illegally in the 2016 election.