The market reversed the recent downward trend by posting a 1.35 per cent gain yesterday, adding almost €1 billion to the value of the market, with the ISEQ index ending the day at 4,845.60. Much of the gains were made on the back of strong performances by the financial stocks, which bounced back from a string of poor performances earlier in the week.

AIB was the main beneficiary of better sentiment among investors. The bank finished up 37 cents at €9.57. Bank of Ireland also put in a strong performance, finishing up 25 cents at €6.95. Irish Life and Permanent, which Merill Lynch described yesterday as well positioned to execute its "Ireland first" philosophy, failed to realise gains. It fell by two cents to finish at €8.78. Despite the strong performance in the financials, one dealer said most analysts "weren't knocked over by it" and noted there was still plenty of stock about.

There was some speculation of a potential bid for Eircom by Deutsche Telekom, which recently sold its stake in Global One worth $2.7 billion (€2.73 billion) according to analysts. And a report issued yesterday by Salomon Smith Barney set a target price of €4.77 for the stock, arguing it was a likely takeover or merger partner. Yesterday the stock finished up 5 1/2 cents at €4.07 1/2.

Several stocks recovered after recent profit-taking. CRH climbed 15 cents to finish at €19.35. Independent News and Media gained 10 cents to €7.90.