Banks lead Iseq higher

European stock markets made gains today amid optimism that the European Union will help Greece tackle its budget deficit.

The Iseq index of Irish shares joined in the upbeat mood, finishing up 1.75 per cent, as investors moved beyond the difficulties in Greece and searched for value in the prices of battered stocks.

Resurgence in airline stocks and further bounces in financial stocks led the rally across Europe, with building and construction stocks lagging slightly.

In Ireland, there was renewed buyer interest in the two quoted National Asset Management Agency (Nama) banks, AIB and Bank of Ireland. Bank of Ireland closed up 6.2 per cent at €1.46, while AIB rose 5.9 per cent to €1.79. It was "onwards and upwards" for both banks, according to one Dublin-based shares dealer.

With little newsflow about the prospect of an amalgamated "third force" in banking, Irish Life & Permanent's gains were more muted, but it still finished up 1 per cent at €3.10.

As investor sentiment towards the prospects for global tourism improved, Aer Lingus closed at 67 cent, up 4.7 per cent, while Ryanair also gained 4.7 per cent to close at €3.61.

Independent News & Media, which announced the long-awaited disposal of its London Independent titles, soared 12.4 per cent to 11 cent.

Paper and packaging group Smurfit Kappa regained the losses of recent days, as buyer interest helped it to a 5.5 per cent climb. The stock closed at €5.99.

Drinks group C&C remained unfazed by yesterday's UK budget, which included an increase in cider duty, and the stock rose 4.7 per cent to €3.16.

Building materials group CRH rallied in the afternoon, closing up 1 per cent at €18.82.

There were few fallers on the day, but they included pharmaceutical group Elan, building company McInerney and industrial holdings group DCC.