LONDON/HONG KONG – World shares gained on Tuesday as investors weighed up the extent to which the Omicron coronavirus variant would hit economies around the world, with the dollar softening as appetite for riskier assets made a cautious return.

The broader Euro STOXX 600 rose as much as 1.1 percent. German DAX's added 0.8 percent, with London's FTSE climbing 0.9 percent.

Semiconductor and chip stocks grabbed the limelight, with ASML Holding, ASM International, and STMicroelectronics all up around 2 percent after a positive trading update from US chipmaker Micron Technology.

"It's a game of trying to assess to what extent the Omicron story is going to cause uncertainty," said Olivier Marciot, senior portfolio manager at Unigestion.

"Even though it's going to be impactful for real life and the real economy for a few weeks, markets are hoping it won't lead to what everyone fears, which is a global slowdown."

The MSCI world equity index, which tracks shares in 50 countries, added 0.4 percent.

US stock futures were up 0.6 percent. Wall Street had sunk over than 1 percent on Monday as investors worried about Omicron potentially undercutting the economic rebound, and a critical setback to US President Joe Biden's social-spending bill. 

The sombre US session underscored market fears that rapidly rising cases of the coronavirus variant would yet again force governments around the world to impose lockdown measures, potentially choking off fragile recoveries from similar measures earlier in the year.

Still, investors were on Tuesday cautiously optimistic that the economic hit would not be as severe this time around, buying stocks and selling perceived safe-haven currencies such as the dollar and the Japanese yen.

In thin trading volumes ahead of year-end holidays, MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1 percent after slumping on Monday to its lowest in a year.

"December is about V for Volatility and not directional market trends," said Jeffrey Halley, senior market analyst at Oanda.

Yet while the widespread selling of global shares appeared to have eased, analysts still voiced caution about risks from Omicron.

"COVID-19 remains a threat to the global economy. Initial evidence suggests the Omicron variant is more transmissible but results in less severe illness compared to previous variants," economists at CBA wrote in a note.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down 0.2 percent at 96.493.