Most Asian markets rose Tuesday as hopes the world could begin to return to normal were boosted by news that another vaccine candidate appeared to be effective against the coronavirus.
However, while airlines led the gains, a broad rally across equities was tempered by investors moving out of tech firms and others that have benefited during the pandemic.
Surging infections across the US and Europe and concerns that Washington lawmakers are unlikely to pass any big stimulus package before the end of the year were also causing nervousness.
The mood among dealers has been upbeat this month after Joe Biden's US election win paved the way for a little more certainty on the world stage and pharma giants Pfizer and BioNTech announced their virus vaccine had been 90 per cent effective.
The news fanned hopes the global economy could soon begin to get back on track.
On Monday that outlook was given another boost when Moderna said early results showed its candidate was 94.5 per cent effective.
The United States' top infectious disease scientist Anthony Fauci hailed the announcement as "stunningly impressive" and "really a spectacular result".
All three main indexes on Wall Street rallied, with the Dow and S&P 500 hitting new record highs.
And after a stuttering start, Asia battled to extend the advances following a healthy run-up Monday.
Tokyo, Hong Kong, Sydney, Singapore, Wellington, Taipei, Mumbai, Manila and Jakarta were all in positive territory but Shanghai and Seoul edged down.
"We might be transitioning from a defensive bull market to a more cyclically offensive one but more clarity is required in terms of when social mobility will normalise," said Chris Iggo at AXA Investment Managers.
"That isn't clear yet. The euphoria created by the presidential election result and the vaccine announcement will give way to a more sober analysis of how long and smooth the road to recovery will be."
'Long dark winter'
Firms that have been battered by the virus were enjoying a healthy run-up.
Cathay Pacific surged more than seven percent in Hong Kong and Australia's Qantas piled on more than one percent, while Air China and Singapore Airlines each jumped more than four percent.
And Axi strategist Stephen Innes offered a positive assessment for the outlook, saying: "The market is mega bullish on every time horizon beyond a few days as the roaring 2020's trade is coming soon."
However, investors are growing increasingly worried about the immediate situation, with the US reporting more than 100,000 new infections each day for almost two weeks, while several cities including New York have reimposed containment measures.
And with Europe also struggling with a second wave, there is a fear that the already shaky world economic recovery will be knocked off course.
"The fact remains that for all the optimism over multiple vaccine candidates, none of them will be available to offset the problems currently being faced right now, as we head into a long dark winter," said CMC Markets analyst Michael Hewson.
Hopes for a US stimulus remain slim. Biden on Monday called for Congress to "come together and pass a Covid relief package like the Heroes Act" that helped the economy weather the initial phase of the outbreak.
But Republican Senator Richard Shelby poured cold water on that, saying: "We're not going to pass a gigantic measure right now -- and the question is will we pass it later? Doubtful." Federal Reserve vice chair Richard Clarida, however, said the central bank could expand its vast bond-purchase scheme to support growth, adding it "is committed to using all of our available tools". Key figures around 0700 GMT Tokyo - Nikkei 225: UP 0.4 per cent at 26,014.62 (close) Hong Kong - Hang Seng: UP 0.1 per cent at 26,402.03 Shanghai - Composite: DOWN 0.2 per cent at 3,339.81 (close) Euro/dollar: UP at $1.1855 from $1.1854 at 2200 GMT Pound/dollar: UP at $1.3212 from $1.3198 Dollar/yen: DOWN at 104.51 yen from 104.56 yen Euro/pound: DOWN at 89.73 pence from 89.82 pence West Texas Intermediate: UP 0.7 per cent at $41.61 per barrel Brent North Sea crude: UP 0.8 per cent at $44.17 per barrel New York - Dow: UP 1.6 per cent at 29,950.44 (close) London - FTSE 100: UP 1.7 per cent at 6,421.29 (close)