The year-and-a-half-long rally across markets has petered out in recent weeks on fears about the new Covid variant and government measures to contain it, which come just as central banks begin to remove the vast financial support put in place at the start of the pandemic.
Traders are also keeping an eye on developments in Washington after Joe Biden said he was optimistic he could win the key vote of Democratic Senator Joe Manchin, who said Sunday he would reject the present proposal, throwing the president's economic agenda into doubt.
After being skittled on Monday, Asian markets bounced Tuesday thanks to a healthy dose of bargain-buying, and the positive energy filtered through to Wall Street and Europe.
The buying was also helped by expectations that the US Food and Drug Administration will authorise pills from Pfizer and Merck & Co. to treat Covid-19 as soon as this week, providing fresh tools to battle the disease.
However, analysts warned that with trade thinning heading into the festive break, volatility would stay high until the new year, and Asia saw equities fluctuate through the morning.
Tokyo, Hong Kong, Sydney, Seoul, Taipei, Wellington, Mumbai, Bangkok and Jakarta rose but Shanghai, Singapore and Manila slipped.
Oil inched up to extend Tuesday's strong gains as the festive mood lifts hope for an improvement in demand, while a closely watched report suggested US stockpiles fell again last week.
Omicron remains the main focus of concern for investors as some countries reimpose tough measures -- the Netherlands is in a Christmas lockdown -- raising questions about the recovery, while inflation continues to harry trading floors.
But observers remain generally upbeat that economies will still return to a semblance of normal as vaccines kick in.
Nicole Webb, of Wealth Enhancement Group, was optimistic the reopening will pick up again in time.
"While this variant is significant and the impact is powerful, I do still have my rose-coloured glasses heading into the New Year because below the surface there is still a lot of opportunity" away from trades that are played out or frothy, she told Bloomberg TV.
Meanwhile, signs that Omicron could be less severe than first feared are also providing some lift.
The variant "is and will continue to have an impact on the global economy", said National Australia Bank's Rodrigo Catril.
"But now there is the prospect that its impact could be shorter and shallower, favouring a positive outlook for 2022 with consumers and corporates well placed to support the economy next year, amid high levels of savings and employment."
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