"Globally, a loss of momentum and the renewed rise in COVID-19 infection rates points to the need for additional fiscal and monetary support. That policy outlook is continuing to provide a supportive backdrop to equities despite recent volatility," wrote ANZ Bank New Zealand in an analyst note.

U.S. traders posted strong gains on Wall Street on Monday, particularly in hard-hit sectors like hotels, banks and airlines which posted sizeable gains after several days of decline.

On Wall Street, Dow Jones Industrial Average rose 1.51per cent, the S&P 500 gained 1.61per cent, and the Nasdaq Composite was up 1.87per cent.

MSCI's gauge of stocks across the globe gained 1.68per cent, while the STOXX 600's banking stock index was up 5.6per cent, after hitting a fresh all-time low on Friday.

But there were still some signs of caution, as Europe is experiencing a rise in new COVID-19 infections and some U.S. states continue to grapple with high case numbers.

Safe-haven spot gold added 1.2per cent at US$1,881.49 an ounce. U.S. gold futures gained 0.89per cent at US$1,874.30 an ounce.

But the U.S. dollar dropped from a two-month high against a basket of currencies Monday, with the dollar index falling 0.3per cent, its biggest daily percentage drop in roughly three weeks.

The weakening U.S. dollar helped drive up oil prices. Brent crude settled up 51 cents to US$42.43 a barrel, or 1.22per cent. U.S. West Texas Intermediate settled up 35 cents at US$40.60 a barrel, or 0.87per cent.

U.S. Treasury yields were largely flat, with no fresh data or issuances shaking up the market. The benchmark 10-year yield US10YT=RR was up 0.2 basis point on the day at 0.661per cent.

(Reporting by Pete Schroeder; editing by Richard Pullin)