The dollar lost ground against the yen and deutschmark yesterday after a surprise interest rate cut from the US Federal Reserve overnight which pushed shares and bonds higher around the world.

Leading London shares ended with gains of around 1.5 per cent, while shares in Frankfurt and Paris also rose, by 1.8 per cent and 0.8 per cent respectively.

In Dublin, the ISEQ index continued its strong rally, rising 104.25 points or 2.56 per cent to 4,183.09.