Financial shares fared generally better than industrial stocks in calm trade as international markets steadied after the volatility of recent weeks. "It's been a fairly stable day in equity markets generally, comparatively calmer," one equity trader said.

The ISEQ index of Irish shares ended 13.79 points or 0.37 per cent higher at 3,705.21 as dealers reported that institutional investors appeared to be leaving the sidelines, happy to play the market again.

Banking shares were helped by a firm performance by financial stocks in London and New York, although traders said there was little interest on the buyside in industrial stocks.

"Financials have been a bit firmer in the States in recent days and the bank sector in London is reasonably friendly. We have seen good demand for Bank of Ireland ahead of the results next week," another dealer said.

Among the financial stocks, Allied Irish Banks gained 3p to 578p and Bank of Ireland, which reports half-year results next Thursday, firmed by 5p to 865p. Traders said a large bloc of Irish Life stock traded at 342.5p during the day, at a sizeable 9.5p discount to its previously traded price of 352p. But the shares were placed with both domestic and overseas institutions and the price subsequently recovered to finish at 350p, down 3p on the previous close.

The major Irish industrials performed less well, however, with building materials group CRH losing 8p to 790p and Smurfit shedding 4p to 190p.

But Kerry Group, which announced it was buying SDF Foods, a Malaysian food ingredients business for £6.6 million from a consortium of Danish and Asian investors, gained 10p to 820p.

Dealers said the acquisition was small in financial terms but an interesting strategic move. "It gives them their first foothold in the Far East," a trader said.

Among second-line stocks, Grafton surged 40p to 1340p. Dealers said the rise was due to a shortage of stock and volume was light but said Grafton remained a popular stock with the outlook for the business good going into 1998.

Northern Ireland-based engineering group Powerscreen, which announced a 15 per cent rise in half-year pre-tax profit on Tuesday, slipped 17p to 761.5p as traders reported some profit-taking.

Ryanair's share price was unmoved at 332p despite results from British Airways which were ahead of market expectations despite showing an 8.5 per cent drop in pre-tax profit to £430 million sterling.

The British airline, the world's largest, is considering setting up a no-frills, low-cost service which would rival Ryanair.