Iseq:3,032.38 (+76.60) Settlement date:December 28th

THE IRISH market comprehensively outperformed its European peers yesterday as banks returned to favour with investors and reports of a CRH acquisition boosted the Iseq’s biggest stock.

The banks bounced back from a dismal performance yesterday to make double-figure gains. AIBwas up 18.74 per cent at €1.229, following a day yesterday when it threatened to slip below €1.

Its main rival, Bank of Irelandwas up over 11 per cent at €1.352. It came close to 80 cent at one stage in Monday's trade.

Volumes were light enough, according to traders. Almost eight million AIB shares changed hands yesterday, while investors bought 2.2 million Bank of Ireland units.

Dealers said gains made by both banks in New York yesterday helped boost their performances.

Developments in the US were also responsible for a near 3 per cent increase for CRH, which closed at €19.492.

Local papers reported that its main US materials subsidiary, Oldcastle, had bought a smaller rival, Wheelers, in Texas. Wheelers has sales of $200 million a year and 500 staff. The deal would be the first significant acquisition by CRH for some time. Along with this, there was positive data from the US and UK housing markets yesterday.

The company accounts for around one third of the Iseq, so its 2.95 per cent gain had a noticeable knock-on effect.

Elsewhere Ryanairadded 1.24 per cent to close at €3.43. Its smaller competitor, Aer Lingus, gained 9.62 per cent to close at 57 cent. Dealers suggested Ryanair's strong performance was "dragging Aer Lingus along with it".

Smurfit Kappa, one of the Iseq's stronger performers in recent months, slipped by one-third of a per cent to €6.42.

There was some seasonal cheer for drinks firm C&C, which gained 1.2 per cent to close at €2.855.