Oil and equity markets staged solid rebounds on Tuesday after the previous day’s pummelling, with signs of coordinated action by the world’s biggest economies to cushion the economic impact of coronavirus helping pull investors out of panic mode.

Brent roared back as much as 10 per cent on hopes a supply cut deal could be rescued while most benchmark government bond yields were off record lows as hopes for stimulus in the face of the epidemic boosted risk sentiment.

Wall Street main markets wasted little time in recouping at least 2 per cent of the 7 per cent they had slumped on Monday, one of their worst days on record.

The oil and gas and mining sectors were leading the charge for Europe as oil recovered some of Monday’s 25 per cent fall following what had appeared to be the complete breakdown of a global oil pact between Opec and Russia.

Yields on benchmark US 10-year Treasury debt more than doubled to 0.70 per cent and those on German Bunds jumped around 20 basis points at one point as investors pared some safe-haven holdings, though they were beginning to ease again.

Supporting the mood was a pledge from US President Donald Trump on Monday to take “major” steps to protect the economy and float the idea of a payroll tax cut with congressional Republicans.

Japan said it would spend another 430.8 billion yen ($4.1 billion) to ease the effects of the coronavirus outbreak and Italy’s deputy economy minister announced that mortgage payments would be suspended as the country deals with the second highest number of cases outside China.

Some of the biggest global investment banks, including JP Morgan, Citi and Barclays, now expect the Federal Reserve to cut US interest rates to zero in the coming months as part of a mass global move to provide some ballast and liquidity to the financial system.

Tuesday’s market fight back had begun to gain traction in Asia. Japan’s Nikkei had ended the day up 0.85 per cent, after earlier touching its lowest level since April 2017.

Australia’s index closed up 3.1 per cent as some went hunting for bargains in beaten down stocks. China’s Shanghai Composite Index traded 2.1 per cent higher as new domestic coronavirus cases tumbled. The news continued to be negative elsewhere, however, with Italy ordering its citizens not to move around other than for work and emergencies and banning all public gatherings.