The G20 deal helped to cheer up investors
Stock markets have rallied after world leaders reached a $1.1 trillion deal to tackle the global economic crisis at the G20 summit.
London's FTSE 100 index closed up 4.3%, Germany's Dax index gained 6.1% while France's Cac 40 rose 5.4%.
US markets also took heart as the global efforts unveiled added to optimism that the worst might be over for the world economy.
In New York, the Dow Jones rose 2.8%, or 216.5 points, to 7,978 points.
Stocks were also boosted as the US announced changes to accounting standards that would give companies more freedom in valuing assets and reporting losses.
The Financial Accounting Standards Board (FASB) approved the proposals, which could help boost bank balance sheets.
Earlier, shares in Asia closed higher. Japan's Nikkei 225 index rose 4.4% while Hong Kong's Hang Seng gained 7%.
Recent upbeat economic data on the US housing market and on the manufacturing sector has cheered investors.
"Everyone is in a buying mood," said Eric Ross, director of research at brokerage Canaccord Adams.
"Everyone is feeling good."
Hopes that the global downturn might be easing also pushed oil prices up almost 10% to above $50 a barrel.
US light, sweet crude was up $4.25 to $52.64 a barrel, while London Brent crude rose $4.31 to $52.75 a barrel.
"There seems to be a G20 factor," said Tony Machacek, an oil broker at Bache Commodities in London.
"The stock markets are strong and the dollar is weaker. That is also helping the market."