Analysts continued to say that the real test is yet to come, but investors looking for some bright signs helped push markets into positive earnings territory for most of the day.
ABN Amro Craigs broker Chris Timms said there was no shortage of economic data and potential corporate news as traders got back to work after the holidays.
There was some nervousness ahead of jobs data out in the United States this week.
US November retail sales would also be released this week.
The real hope was that the US markets could build on Friday's rally, when the Dow Jones Industrial Average ended a four-week losing streak and closed above 9000 for the first time since November 5.
December balance dates meant companies would start reporting quarterly results in the middle of next month, but in New Zealand retail figures from companies such as Briscoe Group, The Warehouse Group and Hallenstein Glasson would give an indication within a short time of what to expect.
"We'll have a pretty clear indication later this month of what to expect from the next reporting period."
The next few weeks would show whether investors were comfortable enough to return to the market, he said.
The drivers would be sentiment - whether investors felt good enough about prospects despite what companies were saying - and the need for income.
Slashed interest rates would have people looking to dividend-paying companies for income rather than getting small returns at a bank, Mr Timms said.
President of New York-based Leeb Capital Management Stephen Leeb told Reuters an estimated $US8.9 trillion ($NZ15.1 trillion) was sitting on the sidelines in cash and money markets.
"High cash levels and low stock prices historically go hand in hand. The current level as a percentage of the stock market's capitalisation matches that at the market bottom in 1990."
The huge amount of liquidity had yet to include the massive amount of money that would be created as a result of the Federal Reserve's actions to stimulate the economy and financial system.
That also could help bolster markets in coming months, he said.
Mr Timms said the US would lead any global recovery, but President-elect Barak Obama had plenty of issues to deal with before a recovery was bedded in.
New Zealand, and to a lesser extent Australia, were isolated from the worst of the fallout because of internal economic drivers for their sharemarkets.
Those drivers included people looking for income from the sharemarket as the Reserve Bank aggressively cut interest rates.
The NZX closed up 1% for the day. The ASX softened as the day wore on after some big gains in early trading from mining companies.
Asian markets were up 2% across the board on hopes of a better year.
Japan's Nikkei reached a two-month high as a weaker yen helped exporting companies such as Honda Motor Company.
Resource-linked firms such as trading houses surged as oil jumped more than 3% after an Iranian military commander reportedly called on Islamic countries to cut oil exports to supporters of Israel over Israel's ground offensive in the Gaza Strip.
