Eurozone moves spark worldwide share rally

Stocks on Wall Street surged on positive signs of efforts to tackle Europe's sovereign-debt crisis.

Reports said eurozone leaders were negotiating a new pact that included measures to curb excessive debt by making budget discipline legally binding.

The European Central Bank was also seen to take more action to halt the selloff in debt markets.

This boosted financial stocks, with Morgan Stanley jumping 7.2%, Bank of America adding 5% and Citigroup up 6.4%.

A strong start to the US holiday shopping season also helped boost retail stocks.

At the close (10am NZ time), the Dow Jones Industrial Average was up 291.08 points, or 2.6%, to 11,522.86. All 30 blue-chip components were in the black.

The rally followed a 26-point loss on Friday and a decline of 4.8% for the week.

The S&P 500 index climbed 2.9% to 1192.55, as all but two of the index's components rose. Materials stocks posted the largest increase, rising 4.3%. The Nasdaq Composite was up 3.5% to 2527.34.

Other markets: Europe, Asia up
European markets rallied with the Stoxx Europe 600 soaring 3.7% to 229.84. The index snapped a six-day losing streak on Friday with a gain of 0.7%.

But the bad news isn’t over. Moody's Investors Service warned that "continued rapid escalation of the euro-area sovereign and banking-credit crisis is threatening the credit standing of all European sovereigns."

And the OECD said the debt crisis was the main risk to the global economy.

Banks, which have been among the biggest decliners throughout the crisis given their exposure to indebted nations, were among the biggest gainers. ING rose 11.2%, BNP Paribas jumped 10.3% and Societe Generale rose 9.6%.

Barclays jumped 7.8%, helping to push the UK's FTSE 100 index up 2.9% to 5312.76. Among miners, Antofagasta rose 4.8%, while Rio Tinto gained 4.4%.

The French CAC 40 index surged 5.5% to 3012.93, with financials as well as stocks tied to global economic growth contributing to gains. AXA soared 13.1% while Peugeot and Renault both rose more than 7%.

The German DAX 30 index jumped 4.6% to 5745.33, as Deutsche Bank gained 7.2% and Daimler rose nearly 8%.

Asian sharemarkets posted broad and steep gains as well. Hong Kong's Hang Seng Index rose 2% to 18,037.81, while Japan's Nikkei Stock Average advanced 1.6% to 8287.49.

Korea's Kospi climbed 2.2% to 1815.28, Australia's S&P/ASX 200 index rose 1.9% to 4058.20, the Shanghai Composite Index edged up 0.1% to 2383.03 and India's Sensex rose 3% to 16,167.13.

Commodities: Oil, gold up
Oil futures surged after reports the European Union was considering banning crude imports from Iran in protest at its nuclear programme.

Light, sweet crude for January delivery settled 0.9% u at $US97.58 a barrel in New York. Brent crude on ICE Futures Europe rose $US1.89, or 1.8%, to $US108.29 a barrel.

Gold rallied above $US1700 level as a stronger euro bolstered investor sentiment. The most actively traded contract, for December delivery, was up $US26.90, or 1.7%, at $US1712.70 an ounce in New York.

Currencies: Euro rises
The euro advanced on moves to tackle Europe's debt crisis but the dollar fell as risk appetite revived.

The euro was at $US1.3316 compared with $US1.3239 late on Friday, and at ¥103.77 from ¥102.89. The dollar traded at ¥77.93 from ¥77.74.

The UK pound bought $US1.5516 from $US1.5439, while the dollar traded at 0.9226 Swiss franc from 0.9302 franc.