US stock-index futures and Asian shares jumped, while gold and crude oil fell from record highs after President Barack Obama said yesterday that Osama bin Laden was dead.
Silver fell as much as 13 per cent.
"This is a positive development in the campaign against terrorism," said Jonathan Ravelas, chief market strategist at Banco de Oro Unibank in Manila. "In the last 10 years, bin Laden's presence has been a serious threat to global stability. The flipside is this could be followed by retaliation activities from his supporters."
Bin Laden was killed by US operatives after a firefight at a compound in Pakistan, Obama said.
The news comes almost 10 years after the September 11 attacks on the World Trade Centre in New York and the Pentagon just outside Washington.
The Nikkei 225 stock average gained 1.6 per cent, reaching its highest close since March 11, the day a huge earthquake and tsunami hit Japan.
US treasuries declined, sending 10-year yields two basis points higher to 3.31 per cent.
The Dollar Index, which tracks the greenback against the currencies of six major US trading partners, gained 0.3 per cent to 73.155 from 72.933, after earlier touching 72.813, the weakest since July 2008. "This is good news for the US, and that means the dollar gets bought," said Kuniyuki Hirai, manager of foreign-exchange trading at Bank of Tokyo-Mitsubishi.
"This may reduce the burden of US military expenses and prove that Obama's operation was right."
Oil for June delivery fell as much as 1.5 per cent to US$112.21 a barrel before trading at US$112.73 in after-hours electronic trading on the New York Mercantile Exchange.
Futures retreated from the highest settlement since September 2008.
The oil market focused on whether the news would help unwind the risk premium attached to prices because of war in Libya and unrest in the Middle East and North Africa.
"There's probably a knee-jerk reaction to the extent that part of the geopolitical risk has been supported by al-Qaeda, so there will be an initial sell-off," said Jeremy Friesen, commodity strategist at Societe Generale.
Oil was already down before the news about bin Laden, after Nato airstrikes at the weekend killed one of Libyan leader Muammar Gaddafi's sons and industry sources said Saudi Arabia raised output last month.
In New Zealand the NZX-50 closed down 21.47 points, or 0.61 per cent, at 3497.86 although it clawed back some of the morning's bigger losses late in the day.
Australia's ASX200 closed up 2.1 points, or 0.04 per cent, at 4825.3 points.