[HONG KONG] Asian markets rallied out of the blocks on Monday, with further signs of economic recovery continuing to resonate with investors more than a surge in coronavirus infections across the planet.

The easing of lockdowns is providing hope the global economy will bounce back from an expected recession this year, with Britain's pubs reopening at the weekend and tourist attractions around Europe either now open or planning to.

Better-than-forecast data on US jobs creation and factory activity have also provided a boost to confidence, as are hopes for a vaccine, which observers say is key to kickstarting any major recovery.

Traders have piled back into stocks in a major way in recent months - with the help of vast government and central bank support - with analysts suggesting the gains are also being helped by a fear of missing out on the rally.

"The global economic data and positive coverage on potential Covid-19 vaccines and treatments represent a... whirligig of positive news that is overwhelming gnarly headline flows around the daily virus case counts in the US," said AxiCorp's Stephen Innes.

Shanghai led the gains, jumping three per cent in the morning, while Hong Kong was up more than two per cent and Tokyo went into the break 1.4 per cent higher.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Seoul and Taipei also climbed more than one per cent, while Wellington was 0.9 per cent up with Singapore and Jakarta each gaining 0.6 per cent.

CURBS REIMPOSED

But there remains trepidation on trading floors as new infections spike around the world.

Some US states are reporting record daily increases, with a number of officials considering reimposing lockdown measures, while Brazil and India are also seeing worryingly large rises.

And Australia said it would effectively seal off the state of Victoria from the rest of the country as authorities struggle to control a surge in cases.

For the first time since the global pandemic began, the border between Australia's two most populous states - Victoria and New South Wales - will be shuttered, beginning midnight on Tuesday, officials from both states said.

The outbreak is weighing on Sydney stocks, which were flat in afternoon trade.

"For now the positive data surprises and huge fiscal and monetary stimulus are the overwhelming forces," National Australia Bank's Rodrigo Catril said in a note.

"But the increase in Covid-19 infections, not just in the US, means that they need to be closely monitored - the introduction of more severe containment measures has the potential to derail the positive vibes in markets."

Shane Oliver, at AMP Capital Investors, said the recovery would likely be slower than the "Deep V" rebound that many are hoping for.

"Trends in new coronavirus cases along with pressure on medical systems will continue to be watched closely, particularly in US states," he said.

AFP