With London roaring ahead to a record high as fears of an interest rate rise receded on the back of the surprise in inflation, the Irish market moved ahead strongly. The overnight surge on Wall Street was another major factor driving share prices upwards even though the Dow was struggling to hold those gains in its opening session yesterday.

The pattern in Dublin was the same as has driven the market ahead in the first six months - sustained demand for financial shares with industrial stocks enjoying mixed fortunes. Industrials with an exposure to the Far East, antipodean and South African economies have been worst hit.

Financials were generally stronger and accounted for most of the rise in the index. AIB was 15p higher on a new high of £11.35 and is moving closer to the magical £11.82 that will see break through a market capitalisation of £10 million. Bank of Ireland was 7p higher on £15.27, but is still well short of its £15.90 high and seems to be losing out in investor sentiment to AIB.

Other financials were mixed, with Anglo Irish Bank up 5p to 205p, Irish Permanent 10p higher on 970p while Irish Life eased back 6p to 710p.

CRH was, as usual, the best of the industrials and closed almost 11 1/4 p higher on £10.47 although Smurfit remains out of favour and closed unchanged on 202p as downgradings took their toll.

An indication of the switch in sentiment towards Smurfit is indicated by the fact that the share was trading as high as 277p immediately after the confirmation of the JS Corp-Stone merger.

JS Corp has suffered even more and was trading on $13 7/8 last night compared to the $22 it reached following the merger announcement.

Morgan Stanley is one lucky investor, with Smurfit buying 20 million of its JS Corp shares for $25 each as part of the Stone deal.

Weakness in southern hemisphere currencies continue to dog Independent and the share was another 8p weaker on 345p despite Davy's suggestion that the sell-off of the shares has been overdone.