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A bounce in the price of oil helped fuel a rally in equities in Asia on Tuesday, a day after global markets suffered their biggest losses in more than a decade, though observers remain on edge over the coronavirus outbreak.

Global stock markets capitulated on what has become known as "Black Monday", with the Dow on Wall Street plunging more than 2,000 points, triggering an emergency break in early trade.

Asia had suffered a meltdown as the deadly disease continues to infect thousands and shows no sign of abating.

But there was relief on Tuesday as oil prices jumped up to eight% after plunging by a third the previous day, in their worst session since the 1991 Gulf War.

The rush for safe investments also sent yields on US Treasuries to record lows, while the VIX "fear" index is within touching distance of its record high seen during the global financial crisis.

After a shaky start that had sparked fears of another rout, regional markets pushed into positive territory, with energy firms clawing back some of their massive losses.

Tokyo ended up 0.9% and Shanghai finished 1.8% higher with Hong Kong adding two% in the afternoon.

Sydney surged more than three%, while Singapore, Jakarta and Bangkok gained more than two%. Manila, Taipei and Seoul also clocked up gains, though Wellington fell 1.8%.

Gulf stocks also saw a bounce, with Dubai up 5.5%, Abu Dhabi gaining 4.2%, and Kuwait and Qatar also making big advances.

Sentiment was boosted by news that Chinese President Xi Jinping had visited Wuhan, the centre of the virus outbreak, lifting hopes that the country is well on track to recovery as new infections fall.

The news comes after weeks of quarantines that have rocked the global and local economy.

Speculation is also mounting that the Federal Reserve will cut interest rates again, having slashed them last week, while the European Central Bank is due to meet this week to discuss monetary policy.

And Donald Trump said his administration would be meeting lawmakers to discuss economic relief measures to mitigate the impact of the disease as it spreads through the United States.

Still, while governments and central banks have unleashed, or are preparing to unleash, stimulus, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

That has now been compounded by an oil price war between Saudi Arabia and Russia that sparked Monday's crude price plunge.

"Given market moves and other developments, we expect to see further stimulus announcements, both monetary and fiscal. As these come, they should help to stabilise sentiment, though we believe fear and volatility will remain high for some time," said Esty Dwek, at Natixis Investment Managers.

While the outbreak appears to be slowing in China, investors are desperately looking for signs of an easing in Europe and the United States.

Italy is now the worst-hit country outside China, with more than 9,000 cases and hundreds of deaths. On Monday, Prime Minister Giuseppe Conte said he was extending restrictions on travel and public gatherings initially imposed on the north to the entire country.

AxiCorp's Stephen Innes warned the panic on markets had not yet stopped, with "growing evidence that an oil shock of historic proportions is now underway".

And Toshikazu Horiuchi, a broker at IwaiCosmo Securities, added: "Nervous trading is likely to continue for now." Top exporter Saudi Arabia sparked the crisis when it slashed prices it charges customers following a bust-up with Moscow over crude output cuts, starting a price war.

Chris Lafakis, energy economist at Moody's Analytics, said: "With COVID-19 already savaging demand for travel and transportation, the last thing oil producers needed was a supply shock that would hit their pocketbooks even more.

"The world is now drowning in a glut of crude oil that appears likely to persist for months." On currency markets the dollar fell back against high-yielding, riskier units after surging Monday.

The Mexican peso led the gains, soaring more than six percent, while the Russian ruble was up almost three percent. South Korea's won put on one percent.

Still, the dollar did regain some ground against the safe-haven yen, jumping 2.3%.

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