From Morrison Securities Pty. Ltd:

On Friday, December 23, Wall Street and European markets rallied overnight after the number of jobless claims in the US fell to the lowest level since April 2008, in a further sign the world's largest economy is returning to health.

Australian stocks rose 1.2 per cent to the highest in a week in their last day of trading before Christmas after positive data from the US boosted market optimism.

Australian shares gained on the back of news that US consumer confidence beat expectations to reach a six-month high, as data indicated that the country's economy should have grown by more than three per cent in the last quarter of the year. At the close on Friday, the benchmark S&P/ASX200 index was up 49.6 points, or 1.2 per cent, at 4,140.4, while the broader All Ordinaries index had gained 49.9 points, also 1.2 per cent, to 4,192.1. On the ASX 24, the March 2012 share price index futures contract was up 48 points at 4,131, with 15,299 contracts traded.

Friday's trading day was shortened, ahead of the Christmas weekend and the market will next open on December 28.

Leading the market higher were shares in Gloucester Coal, which added 21.6 per cent to $8.55 after the company said it had entered into a merger proposal with China owned Yancoal Australia to create a newly listed company on the Australian market.

Miners and industrial stocks led the whole market higher, with both sectors adding 1.6 per cent as rising commodity prices helped push shares higher. BHP Billiton rose 50 cents, or 1.4 per cent, to $35.15 while Rio Tinto added $1.19, or two per cent, to reach $61.84. Financials were also strong performers, adding 1.3 per cent in the wake of a strong push higher by their global peers.

All of the big four banks were up, with Commonwealth Bank adding one per cent to $49.81, ANZ increasing 1.5 per cent to $20.85, National Australia Bank rising 1.3 per cent at $23.70 and Westpac climbing 0.9 per cent to $20.54. Even the embattled retail sector managed to post gains after a week of profit downgrades from several big names. But analysts remained less optimistic on prospects for the sector, with several downgrading their assessments of major retailers. David Jones was the only retailer that was lower on Friday, losing 0.8 per cent to $2.43, while Myer added 0.5 per cent to $1.99. Market turnover was below the monthly average, at one billion shares with a value of $4.3 billion as 18 shares rose for every one that fell.