NEW YORK (Reuters) - World stock markets posted sharp gains on Tuesday as signs of progress in curbing the spread of the novel coronavirus in both Europe and the United States fueled investors’ appetite for risk.

Oil prices made a sharp turnaround as hopes of a deal to decrease supply turned into uncertainty, while the euro jumped against the greenback after six sessions of declines. [USD/]

New York state, the U.S. epicenter of COVID-19, is nearing a plateau in number of patients hospitalized, Governor Andrew Cuomo said, a hopeful sign even as deaths in his state and neighboring New Jersey hit single-day highs.

Worldwide, the novel coronavirus has infected more than 1.3 million people and killed over 74,000, and although the numbers are still rising in many highly populated countries, some tentative improvements have given hope.

“The rally is sentimental and a little premature because if we lift these lockdown measures too soon and try to resume economic activity, we’re going to get a very severe pandemic rebound,” said Indranil Ghosh, chief executive officer of Tiger Hill Capital in London.

The comment echoed that of the World Health Organization, which warned earlier on Tuesday against easing coronavirus measures too early.

The Dow Jones Industrial Average rose 207.86 points, or 0.92%, to 22,887.85, the S&P 500 gained 20.46 points, or 0.77%, to 2,684.14 and the Nasdaq Composite added 21.14 points, or 0.27%, to 7,934.38.

The pan-European STOXX 600 index rose 1.88% and MSCI’s gauge of stocks across the globe gained 1.60%.

Emerging market stocks rose 3.16%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 2.69% higher.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 6, 2020. REUTERS/Staff/File Photo

Japan’s Nikkei posted a 2% gain overnight as its government promised a near-$1 trillion stimulus package - equal to a fifth of its gross domestic product.

With market optimism on the rise, the U.S. dollar dropped and riskier currencies outperformed as risk appetite improved on hopes that lock-downs may be slowing the spread of the coronavirus in some countries.

Action by central banks to ease a scramble for dollars has also helped bring some calm to markets, with massive U.S. stimulus programs and debt issuance seen weighing on the greenback.

“We’ve got a nice decline in volatility across forex and equity markets,” said Kenneth Broux, FX strategist at Societe Generale.

“We know central banks have done a very good job in alleviating the strain in dollar markets and that’s feeding through.”

The dollar index, tracking the greenback against six major currencies, fell 0.849%, with the euro up 1.06% to $1.0905.

The Japanese yen strengthened 0.39% versus the greenback at 108.83 per dollar, while Sterling was last trading at $1.2337, up 0.88% on the day.

OIL SLUMPS

Oil prices gave up early gains to fall sharply as hopes that the world’s biggest producers would agree to cut output were overtaken by anxiety that a deal would not emerge. Some analysts fear that a global recession in the wake of the coronavirus crisis could be deeper than expected, further cutting demand for oil.

U.S. crude recently fell 7.67% to $24.08 per barrel and Brent was at $31.92, down 3.42% on the day.

U.S. Treasury yields rose as the bond market mulled a looming supply deluge and as stocks continued their rise.

Benchmark 10-year notes last fell 16/32 in price to yield 0.728%, from 0.678% late on Monday. The 30-year bond last fell 1-2/32 in price to yield 1.3234%, from 1.285%.