PARIS: European stocks closed higher on Friday, with markets buoyed late in the trading day by the news that Egyptian leader Hosni Mubarak had been toppled.
Minutes after the announcement that the Middle East strongman of three decades had stepped down, the main indexes rocketed upward, after a morning of trading trading lower on worries that rising tensions in Cairo could turn violent.
The upwards move was also helped by Obama administration's launch Friday of a major shake-up of the US housing market, proposing that state-backed lenders are wound up and setting minimum downpayments for buyers.
European bourses had fallen earlier in the day amid uncertainty over the political crisis in Egypt, and in particular over the strategically important Suez Canal.
In London, the FTSE 100 index of leading shares closed up 0.71 percent at 6,062.90 points.
Meanwhile in Paris, the CAC 40 gained 0.15 percent to 4,101.31 points while in Frankfurt the DAX added 0.42 percent to end the week at 7,340.28 points.
"Initial reaction will be good for risk assets -- and this has seen oil, gold and silver slide and equities rise," said CMC Markets analyst Michael Hewson.
"Once the hullabaloo has died down, though, the key test will be how the military fills the vacuum created by this action, and the effect this has on risk appetite going forward."
Elsewhere in Europe, the Swiss bourse was up 0.80 percent, Milan by 0.44 percent and Brussels,by 0.4 percent.
Madrid was more marginally up, by 0.11 percent, while Amsterdam bucked the European trend, ending the day down 0.26 percent.
In the US, the Dow Jones Industrial Average had also changed direction by mid-session, up 0.08 percent at 12,239.02 points, with the Nasdaq up 0.30 percent.
"We think having the military take over was the best solution in ending the deadlock between the protesters and Mubarak," Brown Brothers Harriman said in a comment on the situation.
However, the Wall Street investment bank warned, "there are still more questions than answers with regards to Egypt's ultimate fate and so investors must be prepared for ongoing volatility."
US lawmakers hailed Egyptian Mubarak's departure from power, but urged an "orderly" shift to democracy and voiced anxiety about the country's future relations with Israel.
Mubarak's decision to go, after 18 days of mass protests in Cairo and elsewhere, came as a surprise to the politicians and the markets alike, following his televised comments on Thursday when he vowed to stay on until elections in September.
Asian shares, which closed before Mubarak's ouster, were mixed on Friday.
Seoul dived 1.56 percent, or 31.31 points, to 1,977.19 and Sydney ended 0.68 percent, or 33.5 points, lower at 4,880.9, while Taipei tumbled 2.57 percent, or 226.70 points, to 8,609.86.
But Shanghai closed 0.33 percent, or 9.17 points, higher at 2,827.33 and Hong Kong broke a four-day losing streak to end up 0.53 percent, or 120.30 points, at 22,828.92.
Tokyo's Nikkei was closed for a public holiday.
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