In Australia, the S&P-ASX 200 rose 5.5% to 4176.9 points while the All Ordinaries were up a tad over 5% to 4143.3 points.

The rally comes after the prime minister yesterday announced the government would guarantee the estimated $700 billion deposits in Australian financial institutions, along with the overseas lending of banks and other lending institutions.

While Rudd said the country was facing "the economic equivalent of a rolling national security crisis", the unprecedented move to guarantee savings and loans has injected a small amount of confidence into the Australian financial system.

However, the rally may only be temporary for resource stocks.

Friday’s session on the London Metal Exchange saw metals punished once more, with copper, nickel, lead and zinc all falling yet again.

Copper was one of the worst hit, with the red metal’s spot price dropping 9% to $US4869 per tonne. The price of the metal has come under heavy pressure in recent weeks, dropping from $7776/t on September 22 to current levels. The commodity peaked in July at $8900/t.

These prices aren’t quite at panic levels yet for Australia’s copper producers but scrutiny of cash costs can be expected in the next round of quarterlies, especially for the likes of OZ Minerals.

Nickel also fell again, with three-month contracts dropping 7.4% to $12,17/t or to around $5.50 per pound, levels that if maintained will further threaten the economic viability of much of Australia’s nickel mining industry.

And exporters continue to eye the Aussie dollar warily – it rebounded this morning from US64c to 68c.

Meanwhile, gold wasn’t the safe haven it has been perceived to be, with the precious metal dropping more than 7% to $847.40 an ounce.

Analysts blamed gold’s fall on the gyrations in United States dollar and potentially some confidence creeping back into the market following the G7 meeting on the weekend and further action planned to stabilise the world’s banking system.

The price of the metal is expected to rebound in today’s trade, but volatility will remain the order of the day.

Despite the gloom out of commodity prices there was a relief rally among mining stocks: Rio Tinto and BHP Billiton were both up more than 6% each in the first two hours of trade, Fortescue Metals Group jumped A38c to $2.76, while even base metals play OZ Minerals rose over 7% to $1.05.

Western Areas was another gainer this morning up 10% to $4.09, while coal play Felix Resources was up almost 13% to $9.25 and Riversdale Mining gained over 16% or 70c to $4.75.