The Irish and European stock markets rose today, but had closed before a downgrading of Spanish and Italian government debt sent investors running for cover on Wall Street.

The Iseq index of Irish shares was up 0.5 per cent at 2,562.74 just before the close of business today.

The Dow Jones Stoxx 600, which tracks leading stocks in 18 different western European markets, was up 0.8 per cent.

In London, the benchmark FTSE 100 index closed just over 0.2 per cent ahead at 5303.4.

However, the reasonable performances, which marked the third consecutive day that stocks gained, came before ratings agency, Fitch, announced that it was downgrading both Spanish and Italian government debt, bringing them down to AA- from AA+ and giving them a negative outlook.

The move halted a rally in the US and saw the euro lose earlier gains against the dollar. By around 5.30pm Irish time, the S&P 500 index was down 1 per cent in New York.

In Dublin, fruit importer Fyffe’s was an unlikely talking point after around 18 million of the banana company’s shares were traded during the day, sparking rumours that the group has followed up its recent share buyback with an larger one.

The number of shares traded exceeded 5 per cent of the company. Midway through last month, nine million of its shares were traded in Dublin, and three days later the company announced that it had bought back five million of its own shares.

Traders today were speculating that the company has decided to purchase more of its own stock.

The shares closed unchanged at 38 cent, putting a near 7 million value on today’s turnover, but did hit 40 cent at one point during morning trade.

Elsewhere, the news was reasonably good, with traders saying that investors were buoyed by more favourable international comment about the Republic’s ability to recover.

However, the strongest performances were put in by companies whose biggest exposure is to markets outside the Republic.

Oil exploration and production group, Tullow, was up 4.48 per cent at €15.79.

Pharmaceutical developer, Elan, added 2.36 per cent to close at €8.035.

DIY and builders’ merchant, Grafton, was up 2.4 per cent at €2.75.

The markets biggest stock, CRH, was up 0.04 per cent at €12.75.

Ryanair was slightly down at €3.146, and dealers noted that that it had not benefitted from the recent rally on the market.

They pointed out that there have been a number of sellers of the stock this week.

Elsewhere, Smurfit Kappa shed 3.27 per cent to close at €4.14.