Global equity markets mostly rose Monday after last week's painful global sell-off, with attention focused on the US presidential election and a backdrop of rising coronavirus infections across the United States and Europe.
After a hesitant start, Europe rebounded sharply as dealers shrugged off a growing number of virus lockdowns in the region, including in England, though analysts cautioned against complacency.
In afternoon deals, London gained 1.3% while Frankfurt and Paris each rose by around 2.0%.
Wall Street opened higher, with the Dow gaining 1.2%.
Oil prices slid as the reimposition of lockdowns caused worries about demand, while selling was fanned by a pick-up in Libyan output.
"It's an encouraging rebound that we are seeing - but I am not getting carried away yet," OANDA analyst Craig Erlam told AFP.
"There are so many major risk events over the next few days," he warned, adding that a contested US vote would be "the worst possible outcome".
Asia was buoyed by upbeat Chinese PMI manufacturing data published over the weekend as the world's second biggest economy regains strength.
"Perhaps the PMI data is giving these markets a bit of a bump but even this is not anything to get too excited about," added Erlam.
"Europe is going back into lockdown and it may just be a matter of time until the US follows suit."
After months of rallying from March lows, equities were brought to a juddering halt in October as virus cases surged, forcing European governments to reimpose tough lockdown measures that plunged a tentative economic rebound into chaos.
British Prime Minister Boris Johnson at the weekend said England would implement a four-week lockdown from Thursday to temper a second wave, with similar measures taken by Austria, France, Greece, Ireland and Portugal.
Germany, Italy and Spain are enforcing stricter containment measures, meanwhile.
The disease is also rampant across the US, which last week recorded a record number of infections, a further blow to President Donald Trump's hopes of re-election on Tuesday.
The Republican president continues to trail Democrat opponent Joe Biden in national and battleground state polls.
"This week would have been chaotic for investors at any rate, but viewed through the intensifying pandemic lens as Covid-19 rages in the West, it could spell mayhem," said Axi strategist Stephen Innes.
Polls suggest a Biden win could come with a Democratic sweep of both houses of Congress, which would likely see a huge stimulus spending package passed. A win for Republicans in either of the races is expected to result in a much smaller sum.
Analyst Patrick J. O'Hare at Briefing.com said that rising equities should not be interpreted as "a tacit message of comfort about the election outcome".
"What's most likely is that the futures trade is wrapped up in a buy-the-dip push following last week's sharp losses. In fact, it was the worst week for the market since the dire days of March, which says a good bit about the extensive nature of the losses," he said in a note to clients.