An expectation that the Fed would confine its monetary tightening to a quarter-point rise in US interest rates was the main factor behind strong gains on the major international stock markets. A quarter-point increase is now priced into the market and if the Fed confines itself to that then markets should remain in positive territory.
But even though half of the FTSE's 141-point rise was down to gains by British banks on the index, those gains were only partially matched in Dublin where Bank of Ireland fell on the day.
The star of the Dublin market was AIB which jumped 60 cents to #12.30 (£9.69), boosted by the strength of the London market and the stock's addition to Lehman's list of recommended stocks. Lehman analyst Ian Scott said recent under-performance - epitomised by AIB's dismal run in recent weeks - has pushed some banks to levels where they are trading at around fair value in terms of price to book value and return on equity against bond yields.
Bank of Ireland - seen as a front-runner in the bidding for ICC Bank - is still finding it difficult to attract interest and fell three cents to #8.32 (£6.55) - a poor performance given the positive international background. Other financials were stronger, with Anglo-Irish and Irish Life & Permanent - two definite non-bidders for ICC - up seven cents to #2.35 (£1.85) and up 10 cents to #9.70 (£7.64) respectively.
Industrials were generally quiet, but Telecom moved eight cents firmer to #4.37 (£3.44) while Kerry - ahead of interim figures next week - was up 15 cents to #11.25 (£8.86). Smurfit,however, lost four cents to #2.78 (£2.19) but is still in good demand while Ryanair drifted 15 cents lower to #8.80 (£6.93).
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