The ISEQ tracked Wednesday's rally on the Dow Jones, a strong opening session yesterday and a recovery on European bourses to add 2.2 per cent to its value, as fears about the impact of a US interest rate rise abated.

Only AIB failed to impress yesterday as dealers reported that there was still a lingering negative sentiment from last week's results. The bank dropped back 20 cents to €12.00 (£9.45) in contrast to Bank of Ireland which gained 30 cents to €9.00 (£7.09).

Telecom Eireann also rallied, gaining 6 cents to close at €4.40 (£3.47), while on the New York Stock Exchange, pharmaceutical stock Elan shone, gaining 10.6 per cent and rising by $3.0625 to $32.0625 in mid-day trade when more than four million shares were traded.

One dealer said Elan had featured favourably in a number of brokers reports last week which had filtered through while global industry figures released yesterday show that world pharmaceutical sales grew by 9.2 per cent to $196.1 billion (€184.4 billion) last year, with the US market accounting for $79.4 billion (€74.7 billion).

Esat Telecom's 96 per cent increase in turnover to £15.87 million (€20.15 million) for the second quarter when compared to the same period in 1998 prompted a 1.2 per cent increase in its Nasdaq price to $37.50 (€35.27) in mid-day trading.

Meanwhile second-liners on the ISEQ continued to find some favour on the back of Clondalkin's management buy-out (MBO) possibility. Clondalkin rose the equivalent of €1.44 to £5.45 sterling (€8.24) on the deal, representing a 37 per cent increase on its €6.00 price (£4.73) last week.

"It shows the extent to how an MBO can drive the price and there is a possibility that others can follow suit," one dealer said.

Irish Continental was up 20 cents to €11.20 (£8.82), Athlone Extrusions was up 5 cents to 65 cents (51p) and Kingspan eased up 3 cents to €2.38 (£1.87). Newly formed Oakhill gained 5 cents to 55 cents (43p).