Goodbody Stockbrokers is optimistic that the outlook for Irish equities will be positive for the rest of the year. The Irish equity market has shown signs of a more broadly based recovery in the past month, with the ISEQ Index outperforming most international indices by more than 10 per cent. The financial stocks have been particularly strong, which Goodbody says it simply due to undervalued stocks catching-up.

In its latest report the brokers suggest there is still a lot to go for in the market. With interest rate sensitive sectors set to benefit from a levelling off in interest rates, some of the key components in the Irish index, such as financial and construction sector stocks, should benefit most.

The brokers are also positive on Elan. It suggests that investors should watch for sustained interest in Irish stocks from international investors. If they are finally coming to the view that the economy is capable of delivering super-normal growth without being undermined by excessive and sustained inflation, share prices could continue their run for a few months yet, according to Goodbody.