World stocks edged higher on Friday, ending the best week since March 2009 as the great relief rally of 2011 halted for a breather ahead of the decisive week ahead.

The rally trimmed miserable November's losses on Monday through Wednesday and gave December a solid start.

The rises of 7% to 11% in many markets told us just how relieved investors of all sizes were last week that the euro survived for another five trading days.

A drop in the US jobless rate failed to send Wall Street higher, but with gains of more than 7% over the four days to Thursday, a spot of consolidation was to be expected.

The euro fell after four days of gains, the Aussie dollar ended just over $US1.02, gold, oil and copper had big weeks and the US economy looked better on top of the 120,000 jobs created in November.

The jobs data supported the view that the American economy would avoid another recession, but Europe has to avoid the implosion of the euro; that threat has been driving fear levels higher now for months.

That's why the series of meetings in Europe, culminating in the EU leaders meeting Friday night our time (and ending after markets finish trading) will be vital to the global economy, banking and finance and the prospects for a rebound in activity in 2012.

A convincing agreement could see a big opening to trading next Monday, but this week markets will be on tenterhooks.

The key MSCI World Index of stocks was up 0.4% at the close on Friday, and for the week, it surged 8.3%. That was its biggest weekly percentage gain since March 2009

Wall Street shares also registered their best week since March 2009, with the benchmark Standard & Poor's 500 up 7.4% for the week at 1,244.28.

The Nasdaq Composite edged up 0.03%, to finish at 2,626.93 and ended the week up 7.6%.

And the Dow eased 0.01%, to close at 12,019.42, reversing course in the final minutes of trading after touching a high of 12,146.68 during the session.

That left it up 7% for the week, its largest weekly point gain since the week ending October 31, 2008, and the second biggest weekly point gain in its history.

In Australia, the ASX 200 jumped 7.6%, its best week since the end of November 2008.

The Aussie dollar appreciated 5.3% over the week to $1.0223 in Australia - its best week since late October 2008.

The Aussie jumped 5.5% against the yen as well.

On Friday a late rally (in the final half hour) saw the local market end a drifting day with a sharp gain.

The ASX200 closed up 59.2 points for the day, or 1.4%, to 4287.8 points, thanks to a rally in the banks.

The All Ords rose 1.3%, or 58 points, to 4346.1 points.

It was the fifth consecutive day of rises for the local market.

Elsewhere in Asia, Japan's Nikkei Stock Average rose 0.5%, while Hong Kong's Hang Seng Index rose 0.4%, and Shanghai was down 0.3% after being down 1.1%. South Korea's fell 0.4%.

In Europe the relief was the greatest with double digital gains in some markets.

The Stoxx Europe 600 Index jumped 8.7% to 240.73, its largest weekly advance since November 2008,

Markets rose in most major western European economies with France's CAC 40 Index and Germany's DAX Index leaping 11% and London's FTSE 100 Index up a sharp 7.5%.

Copper starred among commodities last week, thanks to the huge relief rally in equity markets and the small move by China to ease its tough monetary policy.

Copper prices in New York were up 9.5% last week, after falling 3.8% the week before.

Given that copper is the most watched commodity these days for a guide to investor feelings about economic growth, especially in China, it was an encouraging surge.

On Friday, Comex March copper futures rose 1.4% to end at $US3.58 a pound in New York. That was a gain of 5c on the day.

Relative to copper and equities, gold and silver (and oil) had much more sedate improvements over the week.

Comex February rose $US11.50 an ounce, or 0.7%, to $US101.13 in New York on Friday.

That was a rise of 3.9% over the week, the best for six weeks, but nowhere near the sizeable gains in share markets or copper.

Comex March silver ended lower on the day on Friday, losing 7c to end at $US32.69 an ounce.

For the week, silver was up 5.4%.

New York crude oil futures were up 4.3% by the close on Friday night, our time.

Nymex January futures added 76c, or 0.8%, to end at $US100.96 a barrel.

It was the 7th weekly gain for oil in the past nine weeks.

Oil has posted weekly gains for seven out of nine past weeks.

In London Brent oil for January settlement rose 95c, or 0.9%, to $US109.94 a barrel.

Copyright Australasian Investment Review.
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