Global stock markets rose sharply on Monday as the dollar weakened, mirroring surging commodities, while signs of a possible international battle for British confectioner Cadbury focused traders' minds.

In London, the share prices of heavyweight miners surged as gold futures reached a record high point, close to $1170 an ounce, while Cadbury hit a two-year high on reports Swiss food giant Nestle is weighing up a bid for its rival.

The dollar slid against the euro on concerns that the US Federal Reserve may keep emergency stimulus measures in place for a while longer, traders say.

In morning trading in Europe, London's benchmark FTSE 100 index soared 1.63 percent, Paris advanced 1.64 percent and Frankfurt won 1.52 percent.

"With no end in sight for the dollar's slump, gold's success looks set to continue pushing the FTSE towards the psychological 5500 barrier," said IG Index trader Philip Gillett.

"Among the food producers ongoing speculation about potential bidders for Cadbury drove a rise... in their share price, with Nestle, Kraft and Hershey all reported to be weighing up takeover offers."

Major Asian markets also closed strongly higher, with Hong Kong gaining 1.41 percent, Shanghai 0.92 percent, Singapore 1.32 percent and Sydney 0.67 percent.

Some markets closed lower however, with Seoul down 0.10 percent.

In the United States, key housing sector data may provide direction for Wall Street in the coming week as the market looks for confirmation of economic recovery and girds for the year-end holiday period, analysts said.

Investors are expected to carefully monitor data on sales of new and existing homes for evidence that a recovery is on track in the sector at the epicenter of the financial crisis.

The head of the IMF Dominique Strauss-Kahn said on Monday that although the worst of the global financial storm had passed, the world economy remains "highly vulnerable."

"Today the storm has passed. The worst has been averted thanks to a bold and rapid policy response and thanks to cooperation," he told delegates at the annual conference of the Confederation of British Industry (CBI) ? Britain's biggest employers group.

Strauss-Kahn, who is managing director of the International Monetary Fund, added: "The economy ... (is) getting better, but (is) still highly vulnerable."

The OECD area of leading industrialised economies pulled clear of recession in the third quarter with 0.8-percent growth but British output still shrank, OECD data showed on Monday.

The 30 countries in the Organisation for Economic Cooperation and Development showed growth of 0.8 percent from output in the second quarter when they had scarcely touched the end of recession with zero growth.

On Monday in London, analysts tracked the latest developments surrounding Cadbury as reports that Nestle was considering a rival bid of about #10-billion for the British group.

US chocolate maker Hershey may also bid a similar amount after Cadbury recently spurned a #9.8-billion hostile bid from US giant Kraft Foods.

Cadbury's share price reached 819.5 pence in reaction, the highest level since 2007.