Stocks in Europe and Asia rose for the first time in four days on speculation that a buyer can be found for Lehman Brothers and this sentiment eased the Irish market ahead by midday.
At 12.32pm the Iseq index of Irish shares was just over 1 per cent higher at 4,355, a rise of 46 points.
Brokers said a combination of hope that Lehman would be sold and the fact that extent of the negative news surrounding the finance house was in the public domain had seen financial stocks gain.
Irish Life and Permanent enjoyed the largest rise as its shares rose 2.4 per cent to €6.71. Anglo Irish Bank shares were also higher, adding 8 cents to €5.15, a gain of 1.5 per cent.
Bank of Ireland shares were up 1.3 per cent to €5.16 while AIB was unchanged.
Food stocks were also up today with Greencore adding 2.7 per cent to €2.24 while Fyffes rose 1.4 per cent to €0.34. Kerry Group was also higher, adding 25 cents to €21.05.
Donegal Creameries, which today warned of a difficult year, saw its shares dip by over 5 per cent to €5.50, although on very light volumes.
Despite a slight increase in oil prices to around $102 a barrel and the collapse of the XL Leisure Group, operator of XL airlines, Ryanair and Aer Lingus shares were higher.
Ryanair shares were 1.5 per cent higher this morning at €2.75 while er Lingus stocks rose by 3.5 per cent to €1.58.
The MSCI World Index added 0.9 per cent to 1,273.83 at 12.06pm in London, lifting the index to a 0.4 per cent gain for the week.
The US Treasury and the Federal Reserve have been working with Lehman on a sale of the securities firm, and a deal may be announced before Asian markets open September 15th, a person with knowledge of the matter said.
"Finding a resolution to the Lehman situation is what is most important for the market," said Kevin Lilley, a London- based fund manager at Royal London Asset Management, which oversees about $63 billion.
"The market is up today because the US government has stepped in to help find Lehman a buyer. Once again the government is lending support to financial markets."
Europe's Dow Jones Stoxx 600 Index advanced 0.8 per cent, while the MSCI Asia Pacific Index increased 0.9 per cent.
Futures on the Standard & Poor's 500 Index fell 0.2 per cent before a report that may show retail sales excluding cars fell.
Additional reporting agencies
