Asian and European markets staged a spectacular rally, even while the Indian markets were closed, following a slowdown in coronavirus infections.
The German benchmark index, DAX was up nearly 4 per cent, while the French CAC was up more than 3 per cent.
In Asia, the Japanese Nikkei gained 4.24 per cent, while the S&P ASX 200 was up 4.33 per cent. The US Dow Futures were pointing to gains of nearly 800 points.
According to reports, Italy, which was at the heart of Europe's pandemic before Spain overtook it in terms of the number of cases, reported its lowest daily COVID-19 death toll for more than two weeks on Sunday. In Spain, infections and deaths began to show a decline, while Germany too reported a slowdown in the number of cases.
Investors are beginning to get increasingly optimistic, that the sharp sell-off in the markets may now be overdone.
The Indian markets which are closed on account of Mahavir Jayanti on Monday, may open higher on Tuesday. The benchmark indices have lost ground for seven straight weeks in a row and there could be some pullback. The indices have now lost as much as 33 per cent from historic highs. Decent gains in the next few weeks cannot be ruled out.