More than €2 billion (£1.58 billion) was added to the value of shares on the Irish Stock Exchange yesterday as the market recorded a three-figure gain for the second day in a row.

Investors responded positively to receding fears of a British interest rate increase, to Internet developments and, belatedly, to recent good results from some of the bigger companies.

The ISEQ overall index closed almost 3 per cent up, bringing it to a level just over 3 per cent below its all-time high of 12 months ago.

A firm opening by both Dow Jones and Nasdaq stocks also provided a positive background for the Irish market. Dealers sounded a cautious note, warning that profit-taking was likely, especially from those who bought into financial stocks at the bottom of the market.

For a change, the leading financial and industrial shares led the recovery, although Irish technology stocks on major international exchanges continued their strong recent run with no sign of any slackening in demand. The biggest single gains on the Dublin market were achieved by AIB, but brokers were sceptical of some reports that AIB's 55-cent gain to €9.00 was solely attributable to recent developments in its Internet banking and e-commerce facilities. These developments are certainly one of the factors behind the renewed demand for the shares, but dealers said that AIB's value against its European peer group was also a significant factor.

One dealer commented that Internet developments are likely to play an increasingly important role in determining share valuations.

Both Fyffes and Independent News & Media have soared in recent weeks because of Internet developments and Ryanair rose strongly yesterday for the same reason.