A STRONG rally by financial shares brought the Irish market into positive territory, but once again trading volumes were low as investors continue to focus their attention on the plethora of economic statistics which have an influence on US interest rates.

The US wage costs figures for the second quarter, which were released yesterday, were seen as benign and should reassure Wall Street about the prospects for interest rates staying unchanged. Bond markets in the US rallied but equities went nowhere.

In Dublin, financials were stronger across the board. AIB gained 6p to 334p, Bank of Ireland was 7p firmer on 430p, Irish Life added 5p to 233p as the prospect of industrial action by sales staff receded while Irish Permanent gained 3p to 388p.

Industrials were marginally weaker, with CRH down 2 1/2p to 575p, although Smurfit was unchanged on 160p. Second liners were weaker with Golden Vale remaining out of favour and down 2p to 63p, while James Crean lost 10p to 190p. Readymix was 5p weaker on 115p.

The main news on the gilt market was the dismal response to the £150 million auction of five year variable rate stock. The NTMA accepted for £67 million, rejected a further £20 million of bids and took the balance of the auctions stock on to its own book.

Interest rate uncertainty means that there is little appetite for shortdated securities. Gilt prices fell a few pence at most points on the yield curve despite the improved outlook for US interest rates.