The TSX saw a big triple digit bounce just after the open as commodity prices rose and European leaders appeared to have made some serious progress on solving their persistent debt crisis.
The S&P/TSX composite index moved ahead 170.57 points to 11,595.27.
The Canadian dollar jumped 1.24 cents to 98.06 cents (U.S.) as investor sentiment improved.
The euro recovered nearly 2.0 per cent and stocks on major bourses jumped on Friday after euro zone leaders agreed on measures to cut soaring regional borrowing costs in Italy and Spain, in addition to directly recapitalizing regional banks.
Spanish and Italian government bond yields fell sharply while safe-haven U.S. and German government debt sold off after it was agreed that EU bailout funds could be used to stabilize bond markets without forcing countries that comply with European Union budget rules to adopt new austerity measures or economic reforms.
Oil prices rallied along with other commodities as the moves caught markets by surprise. Investor expectations for meaningful steps to tackle the debt crisis had all but disappeared in the run-up to the EU summit, which ends later on Friday.
The Dow Jones industrial average was up 1.36 per cent at 12,773.64. The Standard & Poor's 500 Index was up 1.54 per cent at 1,349.50. The Nasdaq Composite Index was up 1.74 per cent at 2,899.16.
In Europe, the FTSE Eurofirst 300 index rose 2.3 per cent, with banks up 3.9 per cent. MSCI's all-country world equity index gained 1.7 per cent and its emerging markets index climbed 3.1 per cent.
Shares of Research In Motion are taking a beating today as investors react to the BlackBerry-maker's dismal earnings results and another delay to its new smartphones.
Shares in RIM fell 14.5 per cent, or $1.37, to $8.09 in early trading on the Toronto Stock Exchange.
RIM stock tumbled almost 14 per cent in pre-market trading in New York this morning, losing $1.24 (U.S.) to $7.89.
The Conference Board of Canada says employment prospects continued to improve in Canada last month.
The Ottawa-based think-tank said Friday that its help-wanted index gained 1.1 percentage points in May.
That continued an upward trend that began late last year, but one that has weakened recently, partly due to a sizable decline in the index in March.
With files from Reuters