ECB move fizzes

While European and US markets leapt as much as 3 per cent after the ECB announced a new program to buy the bonds of troubled eurozone countries, Australia's share market barely rose as post-boom fears dominated.

The dollar jumped by nearly one US cent, hitting companies that earn a large portion of their profits in foreign currency.

"Ultimately the ECB plan must be good news for Australia as well, but for now people seem more fixated on the idea of a post-commodity boom economy, and what that's going to look like in the future," National Australia Bank's head of research, Peter Jolly, said.

"It tells you it hasn't simply been European issues depressing growth prospects, it's a unique thing to do with Australia and commodity prices and the Asian slowdown."

The ECB announced a new bond purchase program for debt-ridden European countries in a bid to fix Europe's banking crisis and prevent a break-up of the monetary union.

Federal Treasurer Wayne Swan said it was a "positive step towards putting Europe back on a sustainable footing".

The definitive steps saw Frankfurt up 2.9 per cent, Paris up 3.1 per cent, and London up 2.1 per cent, while in the US the S&P500 rose 2 per cent and the Dow Jones was up 1.9 per cent.

Local investors were less enthused, failing to exploit the rallies on markets throughout Asia, where Shanghai was up 4.2 per cent, Hong Kong rose 2.4 per cent, and Japan was up 2 per cent.

But in a sign that local investors still welcomed the news from Europe, analysts said there was a small increase in risk appetite for equity and bond markets.

"Clearly resource stocks have been belted in recent weeks and months, and you're seeing a bit of money coming back into them, as well as defensive and yield stocks," UBS managing director George Kanaan said.

"In this era when commodity prices are lower than they were, the Australian dollar needs to be lower. But the fact that it's not, and the fact that it rallied today, cuts a little bit into growth prospects," he said.