The Irish stock market surged by more than 1.6 per cent, encouraged by a strong performance on overseas stock markets in the wake of benign US jobs data which helped ease fears of a US rate rise.

US non-farm payrolls rose by 275,000 in February, only slightly above expectations of 245,000. Investors had feared payrolls would rise by 300,000 or more, giving the Federal Reserve an excuse to hike short-term rates to cool the economy. The Dow industrials roared to record highs on the news, helping European stocks hold the strong gains notched up when the payrolls data was released just before Wall Street opened.

Dealers said Dublin followed European markets upwards but most of the action on the Irish stock market was concentrated in the leading shares, with the two big banks benefitting in particular. AIB was 25 cents firmer at €15.85 (£12.48) while Bank of Ireland gained 35 cents to €18.55 (£14.61). Irish Permanent also closed higher, adding five cents to €14.60 (£11.50) while its merger partner Irish Life also made modest gains, closing 2.5 cents higher at €9.221/2 (£7.27).

Industrial stocks enjoyed a more muted performance with CRH down 2 cents on the day to €16.50 (£12.99) while Smurfit was up just half a cent to €1.86 (£1.46).

However, Greencore, a significant under-performer of late, jumped by 4 per cent on the day to close at €3.80 (£2.99), a gain of 15 cents. Kerry, which is among a host of companies releasing 1998 preliminary results next week, was up five cents to €11.95 (£9.41).