The Irish Stock Exchange surged again yesterday breaking through the symbolic 5,000 point mark for the first time. While the ISEQ index finally closed at 4997.82, the day saw some of the most intense trading in recent months, with even smaller stocks making large gains.

Stock market analysts did not expect the market to reach these kind of levels until the second half of the year. Continued strong international demand for Irish shares is one of the main reasons for the market's current performance.

This factor, combined with the reluctance by shareholders to sell in the midst of a rising market, has helped push the ISEQ index from the low 4000s at the start of the year to its current position.

Yesterday saw several shares hit all-time highs, with AIB and Bank of Ireland still the subject of intense overseas buying interest, although the closing prices of both dipped a little in late afternoon trading.

The volume of trading in Irish Permanent was at its highest level ever as the share price closed at an unprecedented 1034p. The stock was subject to 22 separate changes in price. This was partly explained by its inclusion in the latest Morgan Stanley Capital International Index, one of the most influential indices used by dealers.

Other stocks experienced volumes of trading not seen in recent years, although some big names like Smurfit closed weaker.

In an unprecedented move, another six Irish companies were included in the index and all advanced considerably on the back of the announcement, most notably DCC, up 24p, and Ryanair, up 35p.

Dealers say they expect the upward moves to continue in the short term with institutional investors constantly looking to buy into the two big banking stocks.

Results from Kerry and CRH next week are expected to add to the market's momentum, with some analysts predicting that CRH will report a 21 per cent increase in pre-tax profits on the back of a boom in the construction industry.

The market has grown dramatically since March of last year when the ISEQ stood at 2926 points.

The crisis in Asia is said to have benefited the Dublin market as American investors, who sold out of markets there, are now entering the Dublin market, bringing considerable funds with them.