The huge demand for Allied Irish Banks shares drove the Irish market to yet another new high and at the close the ISEQ Overall Index was over 1.5 per cent at 3687.00. Most of the rise in the index came from heavy buying activity in the major banking shares where Allied Irish Banks was up 40p to a new high of 635p as the market responded ecstatically to the group's half-year results. Bank of Ireland was also in demand and closed up 16 1/2p on 638 1/2p.

Market sources believe that the financial shares are likely to remain in strong demand, with continuing speculation in the market that AIB will use its strong financial position for a share buyback. AIB has clerance for shareholders to buy back up to 50 million shares.

The strength of the Irish market contrasted with some weakness in London where share prices fell modestly, with the London market unsettled by the decline on Wall Street on renewed speculation on an imminent interest rate rise.