Share prices soared on European markets yesterday in response to an overnight big jump in the Japanese market where investors drove the Nikkei ahead 3 per cent on hopes that legislation would at last be enacted to pull Japan out of recession.
But some European traders, particularly in money markets, said they remained cautious about a sustained rally in Japanese shares.
President Bill Clinton, in Tokyo for a summit meeting, has urged Japan to vigorously reform its banking system.
The Irish stock market rose by more than 2 per cent to bring its gains this week to nearly 5 per cent, with the London market also up 2 per cent in the day and by almost 5 per cent on the week. European markets were also stronger, with Paris and Frankfurt both up about 2.5 per cent on the day.
The Dow Jones closed at 9159.55 up 103.50. Financial issues led the market higher on expectations that lower US interest rates will bolster the economy.
However, at the ISEQ's closing level of 4681.93 last night, the Irish market was still 14 per cent off its high of last April. This means that despite the gains of the past week, it is still under-performing London which is within 8 per cent of its July high while Wall Street is less than 2 per cent of its high.
The large capitalisation financial and industrial shares were the main beneficiaries of the continued bid interest.
The biggest gain on the day, was notched up by exploration minnow Ovoca Resources which jumped 17p to 42p on speculation that an announcement is imminent on its Irish exploration programme.
Irish stocks on the NASDAQ market were generally firmer. But software group Iona was one exception and was down $3 1/2 on $26 1/2 as the Irish market closed, losing all the gains of the previous day. This reverse is attributed to a warning by one of Iona's competitors about difficult trading ahead.
London shares extended their gains and raced ahead to hit a 16-week high.
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