MILAN - World stocks climbed to new record highs on Monday as a promising vaccine development from Pfizer and expectations global trade ties will improve under US Democrat Joe Biden boosted risk appetite.

Markets started to trade on the prospect of a Biden presidency last week, but the Democratic candidate's projected victory on Saturday gave more fuel to the move.

Further boosting sentiment was data showing that Pfizer's experimental vaccine was more than 90 percent effective in preventing COVID-19, potentially a big move forward in the fight against the pandemic.

The MSCI world equity index, which tracks shares in 49 countries, rallied after the news broke to reach another record high, up more than 1 percent on the day. On Friday, it posted its biggest one-week gain in nearly seven months.

"The relief rally in equity seems very strong. It also seems to have taken people off-guard," said Arne Petimezas, analyst at AFS in Amsterdam.

The pan-European STOXX 600 climbed almost 4 percent by 1203 GMT, back to February levels and driven by shares in sectors like airlines and travel. Among other risky assets, oil shot up nearly 8 percent, while safe-haven bonds and gold sold off.

E-mini futures for the S&P 500 also got a boost, jumping nearly 4 percent to a record high, although Nasdaq futures remained just under their all-time peak, up 1.7 percent.

Monday's vaccine progress reinforced expectations that the economic damage from the pandemic would be temporary, even if conditions could still weaken further.

"With Europe in lockdown, and lockdown risk in the US, near-term data is likely to look poor," strategists at French bank Exane led by Dennis Jose said.

"However, if a vaccine is approved, it opens up a scenario where consumers unleash their supersized savings, enabling investors to look through near-term weakness."

Earlier, MSCI's broadest index of Asia Pacific shares outside Japan jumped 1.4 percent after hitting its highest since January 2018 on expectations of easing trade tensions following the US election.

Oil prices jumped as investors greeted the vaccine news and the prospect of a Biden victory, shrugging off worries about lacklustre demand. Brent prices added 8 percent to US$42.6.

Spot gold fell 1.8 percent to US$1,914.96 per ounce.

The dollar remained weak on expectations that monetary policy in the United States will remain easy and global trade relations improve.

After posting its biggest weekly loss in more than seven months on Friday, the dollar index was up 0.2 percent to just above a 10-week low, while growth and trade proxies such as the Australian dollar and the Chinese yuan remained in demand.

The euro, which climbed 1.9 percent last week, was up 0.1 percent. 

Sterling added 0.2 percent as the focus turned to Brexit trade negotiations which could come to a head with the European Union summit on Nov 15.