Stocks and oil rebounded on Monday on bargain-buying from last week's blow-out, with traders riding a wave of optimism following pre-weekend Wall Street gains.

"Markets enter the new week with some renewed optimism, having ended the previous week's tumultuous ride in positive fashion," Interactive Investor analyst Richard Hunter said.

The positive start was mirrored in oil markets, with both main contracts enjoying big gains, having suffered heavy losses recently owing to concerns that the Delta spread variant would impact demand as countries restrict people's movements.

Fears about the Covid mutation have rattled world markets as it forces some governments to reimpose containment measures, while sentiment was jolted further last week by minutes from the Fed's July meeting indicating it could start withdrawing its vast financial support by year's end.

Focus is now on Fed chief Jerome Powell's speech to the Jackson Hole annual conference of central bankers and finance chiefs, with hopes for a clue about a taper timetable.

rethink his view to taper soon in light of the Delta variant's global march, which is showing signs of hobbling economic growth.

-AFP