The United States Federal Reserve's appeasement of both interest rate doves and hawks has sent global sharemarkets into a frenzy, with the Australian index recording its strongest single day in a year and a half.
On Friday, the benchmark S&P/ASX200 jumped 2.5 per cent, or 127.8 points, to 5338.6, the biggest single-session surge since July 2013. The broader All Ordinaries lifted 2.4 per cent, or 123 points, to 5312.7.
For the week, the ASX200 rose 2.3 per cent, while the All Ordinaries added 2.2 per cent.
All sectors jumped more than 1 per cent on Friday, with industrials up 3.3 per cent, materials 3.1 per cent higher and financials 2.5 per cent stronger, amongst the best performers.
After a mixed start to the week, the US Federal Reserve helped global markets surge as it shrugged off concerns that a global slowdown could impact the recovery of the American economy, which remains on track, and implied official interest rates will rise next year on its terms. But the Fed on Thursday morning, Australian time, also assured investors that rates wouldn't rise too fast.
"Thursday we had a strong start then we finished a bit weaker, Friday we had a strong start [thanks to the Fed] and it's kept going. There's obviously volume coming in," Morgans senior client advisor Alistair McCorquodale said.
"It's pretty-broad-based, there's no particular sector that's missing out."
Despite Friday's huge run, the ASX200 is still down 0.2 per cent for the calendar year, and the famed 'Santa Rally' is yet to have taken full flight.
"You can give it lots of cut names, in reality it's not happening because the Australia market and economy is looking fundamentally brilliant for next year, it's happening off the back of momentum drive from offshore," JBWere executive director Mike Kendall said.
The banks did a lot of heavy lifting during the week, with Commonwealth Bank surging 2.4 per cent to $83.71 and Westpac rising 1.3 per cent to $32.48. ANZ gained 2.2 per cent to $31.68, while National Australia Bank lifted 2.9 per cent to $32.66.
In corporate news, it has been busy week for the telecommunications sector, which added 1.3 per cent.
Telstra signed a renegotiated $11 billion with NBN Co over the rollout of the Coalition's multi-technology model, which will see the telco progressively hand over its HFC and copper networks. Telstra also signed another deal with NBN Co, worth up to $390 million, to help design and plan the broadband network. Telstra shares finished the week 3.3 per cent stronger at a 13-year closing high of $5.89.
Vocus Communications mounted a bid, worth $653 million, for Amcom Telecommunications in an attempt to create one of Australia's largest telco operators, worth $1.1 billion. The deal involves Amcom shareholders receiving shares in the new company, not cash. Vocus shares finished the week up 2.6 per cent to $5.99, while Amcom shares jumped 19.2 per cent to $2.80.
Santos shares surged 11.6 per cent to $7.99 this week after the oil producer secured a new $1 billion loan facility with ANZ. Energy shares have suffered recently thanks to Brent crude falling more than 45 per cent from its 2014 peak.
Woodside Petroleum struck a deal to buy Apache's stakes in two LNG projects and a West Australian oil field for $4.6 billion. Woodside shares gained 9.2 per cent over the week.
Recall Holdings shares finished the week 14.1 higher at $7.30 after the document management company rejected a $2.2 billion takeover offer from American rival Iron Mountain.
Seven West Media is looking to snap up NSW and Victoria thoroughbred racing broadcast rights in a move that would hurt wagering giant Tabcorp. Seven shares ended the week 4.5 per cent lower at $1.37, while Tabcorp slipped 4.3 per cent to $4.04.
Downer EDI won a $2 billion contract to provider engineering services to a coal mine in Queensland. Downer shares ended the week 12.4 per cent higher at $4.54.
with Stephen Cauchi
