MARKET REPORT: The financials were once again the star performers in Dublin yesterday, with the sector as a whole gaining 1.37 per cent compared to an increase of 0.9 per cent in the wider market.

AIB ended the day eight cents higher at 12.60 after climbing up to 12.80 in early trade.

Davy said the bank's valuation continues to look too low however, pointing to the value of its M&T stake, the inherent strength of its UK and Irish operations and the price agreed for First Active last week.

The broker said a continuation in this "valuation anomaly" could eventually force AIB to either dispose of its 22 per cent holding in M&T, or distribute the M&T shares directly to shareholders.

Bank of Ireland, meanwhile, continued its steady rise, adding 22 cents to finish at 10.57. Anglo Irish rose 10 cents to 10.00, while Irish Life and Permanent outpaced the market with a 25-cent jump to 11.70. First Active closed unchanged at 6.11 after some 2.5 million shares were traded.

In the main industrials, CRH added 10 cents to close at €16.59. Ryanair finished nine cents higher at 6.67 on volume of 3.6 shares, as the date of the Charleroi judgment comes closer.

Independent News and Media saw volume of 2.8 million shares as it rose one cent to 1.76. Grafton was also busy, with 1.5 million shares traded. The stock closed 13 cents higher at 5.33, with most business coming at 5.30.

MBO-target, Barlo, was unchanged at 34 cents. The company said yesterday that Bank of Ireland owned 24 per cent of its shares on behalf of clients.

Iona surged on on the Nasdaq after issuing strong results, but dropped 20 cents to 2.65 in Dublin on low volume.