Australian stocks close 1.91pc higher

SYDNEY: Australian stocks jumped 1.91 percent on Friday after the major central banks of the world helped address liquidity issues by agreeing to lend US dollars to European banks.

At the close, the benchmark S&P/ASX 200 was 77.7 points higher at 4,149.4 following the moves, which sent European and US stocks soaring.

But analysts warned that while it was a shot in the arm for market sentiment, eurozone debt problems remain.

"This doesn’t solve any of the structural issues and doesn't magically wipe the burdensome debt levels carried by many European nations," said IG Markets' Ben Potter.

"So, for participants to think this is the magic bullet is simply wrong.

"We may see markets continue to push higher on the back of these developments but we can't imagine it will be the beginning of a sustained move higher."

The Australian dollar was trading at 103.42 US cents late in the session, up from its 102.17 US cents close on Thursday.

Copyright AFP (Agence France-Presse), 2011