"The start of military activities by the international coalition and some progress with the Japan nuclear crisis has all helped to buoy markets this morning," said trader Ben Critchley at trading group IG Index.

"Weekend news of AT&T's planned takeover of the US arm of T-Mobile has served to lift Vodafone to the top of the blue-chip gainers today, but we are seeing a broad-based rally with a good mix of sectors providing support." French, American and British forces have launched the biggest intervention in the Arab world since the 2003 US-led invasion of Iraq, firing more than 120 Tomahawk Cruise missiles and conducting bombing raids on key Libyan targets. An air strike against an administrative building in a compound including Moamer Qadhafi's residence in Tripoli destroyed the Libyan leader's "command and control capability," a coalition official told AFP. In early trading the Dow Jones Jones Industrial Average was up 1.62 percent to 12,051.02 points. The broad-based S&P 500 rose 1.54 percent to 1,298.89 points, while the tech-heavy Nasdaq Composite gained 50.50 points to 2,694.17 points in intra-day trading. Also spurring trade in the US was the AT&T's plan to buy T-Mobile USA in a $39 billion deal that would make it the country's largest cell phone carrier, and the US Treasury's decision to begin selling off $142 billion worth of  mortgage-backed securities, seen as a signal that markets are getting  stronger.

"The US equity markets are nicely higher in morning action, beginning the  week on a positive note, led by a major M&A announcement in the telecom sector  and some relative optimism of progress in Japan's ability to avoid a nuclear  meltdown," said analysts at Charles Schwab. However, at the same time, the strikes on crude-rich Libya sent world oil prices spiking by more over a dollar, jangling investor sentiment. At 1700 GMT Brent North Sea crude for May was changing hands at $115.16, down from its intraday high but up $1.23 dollars from Friday's close. Asian shares also rose Monday, on hopes that crews would avert a meltdown at a Japanese nuclear plant, but dealers were still cautious while air strikes in Libya hurt sentiment and hiked oil. With Tokyo's stock exchanges closed for a public holiday, the region extended Friday's gains that came after a week of volatility in which billions of dollars were wiped out following the quake-tsunami terror and atomic crisis. Hong Kong ended 1.73 percent, Sydney closed up 0.35 percent and Seoul advanced 1.13 percent. Elsewhere in Europe too the movement was uniformly upwards. The Madrid was up 2.38 percent while Brussels put on 2.35 percent and the Swiss bourse gained 2.06 percent. Amsterdam was up 1.8 percent, Milan up 1.56 percent and Lisbon up 1.48 percent.