The Irish stock market gained a further 1 per cent yesterday but closed off its early highs as continued weakness on Wall Street and in other international markets put a stop to its gallop.
Dealers said some profit-taking became evident in the afternoon, dragging most of the leading stocks down from their morning highs.
"It's overdone. The market's gone too far, too fast and I would expect it to come back tomorrow," one trader said.
The ISEQ index of shares finished 44.4 points higher at 4,303.84 after earlier surging by 1.5 per cent to a record 4,328.12. However, it failed to maintain the momentum in the afternoon and ended 1.04 per cent higher.
Dealers said much of the buying in recent days had been index or computer-led rather than discretionary buying by funds and many investors had looked at the market more coldly yesterday. Following early falls on the Dow, a 40-point drop in the British FTSE index and a 5.9 per cent drop in Hong Kong's Hang Seng index, there seemed little reason to buck the international trend and push Irish share prices higher.
To make further progress, the Irish market will now need support from overseas, although traders said Ireland's positive fundamentals made a sharp reverse unlikely.
Among the leading stocks, Irish Permanent, which missed Tuesday's upward march, made up some lost ground and closed 25p higher at 785p.
However, gains among the other leading financial stocks were more modest, with AIB closing 1p firmer at 745p, off an earlier high of 758p, while Bank of Ireland closed unchanged at 1160p after rising to 1175p earlier in the day. Irish Life, which surged by 24.5p on Tuesday, added 2.5p to 435p.
Dealers said industrial stocks, which had lagged financial stocks on Monday, fared better and CRH closed 25p firmer at 880p, though off a high of 893p, while Smurfit gained 9p to 217p.
James Crean, which said 1997 profits would be significantly below the 1996 out-turn and announced it planned to sell more businesses, gained 10p to 160p. Dealers said there was little new in the statement as half-year profits were down 25 per cent and the company warned at the time that trading conditions were difficult.
