Market soars to new high

ORE than £470 million has been added to the value of Irish shares as the Dublin market surged to yet another new high yesterday. The ISEQ index of shares rose by almost 60 points - a gain of almost 1.9 per cent - to close at 3162.93 with the surprise rise in Central Bank rates coming too late to unnerve the market.

Following the rising trend in London, the Dublin market was also driven ahead on the back of strong demand for Irish stocks from overseas investors.

The sharp fall in the value of the pound earlier this week prompted many overseas investors to seek out bargains in the now cheaper Irish market. Yesterday's buying spree was also helped by a tip in the influential Financial Times Lex column, that it rated the Dublin market "a good bet".

The Central Bank's announcement of a half of one percentage point rise in its key short-term interest rate shocked the market but, coming so late in the day, the news failed to make a significant impact on the overall performance.

"The rate hike took the wind out of the market but failed to dampen the performance of stocks traded towards the close of business," according to one dealer. "It'll be a matter of wait and see today. Most investors will have found this week's events confusing, which could slow things down.

During a hectic day's trading, demand was broadly spread across stocks with the market leaders and the bulk of the second-liners all making good gains.

Shares in London also reached new highs, with the FTSE closing nine points ahead of its previous record high at 4,444.6. Trading throughout the day in London was relatively quiet, with most traders appearing unwilling to commit themselves ahead of the outcome of the British general election.

Most traders were considering the impact of a win by the Labour party, with some predicting that the FTSE could fall sharply on foot of a landslide victory.

"People keep saying the market has discounted a Lab our government, but if the Tories are wiped out there will be a knee-jerk reaction," one trader said.

London shares drew early comfort from Wall Street's third day of gains on Wednesday. Yesterday, however, Wall Street remained capricious and was down around 50. points when London closed.

Most continental European markets were closed yesterday for the May Day holiday.