LONDON – Waning Omicron COVID-19 variant worries and a timely booster shot of Chinese stimulus lifted world stock markets and oil on Tuesday and left traders offloading safe-haven currencies and bonds again.

The FTSEurofirst 300 index was on track for its first back-to-back run of plus 1 percent gains since February while Asia saw record bounces from some of China's biggest firms such as Alibaba and Baidu.

The risk-on mood also helped the dollar climb against safe haven currencies such as the Japanese yen, , which had lost 0.6 percent overnight, as the confidence-sensitive Australian dollar also found buyers.

Safe-harbor government bonds went the other way with yields – which move inverse to bond prices – up 2.5 percent on Germany's benchmark 10-year Bund after falling to a three-month low on Monday.

Reports in South Africa said Omicron cases there had only shown mild symptoms and the top US infectious disease official, Anthony Fauci, told CNN "it does not look like there's a great degree of severity" so far.

"Good news relating to the severity of Omicron should be taken with a pinch of salt. Faster transmission could offset the benefits of milder symptoms," researchers at ING said in a note. "More broadly, it is still early days, even if markets are starting to display Omicron fatigue."

The gains also came after China's central bank on Monday injected its second shot of stimulus since July by cutting the amount of cash that banks must hold in reserve.

Australia's S&P/ASX200 rose 0.95 percent, while Japan's Nikkei advanced 2.1 percent as risk-on sentiment pushed markets higher.

MSCI's main Asia ex-Japan benchmark has lost about 5 percent so far this year.

Elsewhere, markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.

"While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.

"After all, early assessments of Omicron cases have been declared mild, spurring half-full relief."

Also supporting the dollar in FX markets was the expectation the Federal Reserve will accelerate the tapering of its bond-buying programme when it meets next week in response to a tightening labour market.

Oil prices jumped another 2 percent to $74.60 a barrel, adding to a near 5 percent rebound the day before as concerns about the impact of Omicron on global fuel demand eased.

Copper prices also ticked higher while gold was steady at $1,778.5 per ounce on expectations US consumer price data due later this week will show inflation quickening.