Eurozone deal buoys market

Global markets immediately soared when the plan was announced in the early afternoon Sydney time.

"Just when everyone was preparing for a boring end to the week and the financial year, a few EU summit headlines have jolted the market out of its malaise," said the IG Markets analyst Cameron Peacock.

The S&P/ASX200 index rose 49.8 points, or 1.2 per cent, to 4094.6, after trading lower in the morning session. The broader All Ordinaries index added 49.9 points, or 1.2 per cent, to finish at 4135.5.

The dollar rose as well, moving to $US1.0143 from $US1.0073.

The news helped to lift sentiment on the last trading day of the fiscal year. Hurt by worries over a slowdown in China, the market shed 11 per cent over the past year, far underperforming US and other markets.

The chief market analyst at CMC Markets, Ric Spooner, said the news from the European leaders' summit was encouraging but did not mark the end of the eurozone's woes.

Most sectors ended sharply higher, with materials and energy stocks leading the gains, rising 2 per cent and 1.6 per cent respectively, while financials rose 1.2 per cent.

Consumer discretionary stocks had a bumper day after the British player EB Private Equity made a $1.65 billion takeover offer for upmarket retailer David Jones.

David Jones shares soared 33?, or 14.6 per cent, to $2.59. Myer stock rose 7.5?, or 4.9 per cent, to $1.615, and Harvey Norman rose 54?, or 2.6 per cent, to $1.95.

Mr Spooner said the takeover bid boosted market sentiment.

"They are a reminder that you need to be careful about getting out of things at very low prices because somebody else will take advantage of it," he said.

Miner BHP rose 72?, or 2.3 per cent, to $31.44 and Rio Tinto $1.34, or 2.4 per cent, to close at $56.50. Fortescue shares rose 2?, or 0.4 per cent, to $4.90, despite its founder and chairman, Andrew Forrest, buying another 6 million shares, or 0.6 per cent.

Fairfax Media rose 1.5?, or 2.8 per cent, to 55.5?. The biggest shareholder, Gina Rinehart, sent an open letter to the chairman, Roger Corbett, calling on him to accept a "performance milestone" of returning the share price to 87?.

News Corp was down 34?, at $22.03, after the company had rallied on plans to split into two companies. Non-voting scrip was 23? weaker at $21.90.