The latest merger-mania among American banks and a belief that both major banks had been oversold in last week's profit-taking produced a sharp recovery for the Irish market, which closed nearly 2 per cent ahead on the day and is now not far off the all-time high of earlier this month.
"The bulls are back" was the description from one Dublin broker who said that the pattern of heavy overseas demand from overseas investors and limited supply from domestic holders had resumed. With Wall Street well ahead at the Dublin close, further gains seem likely with both banks still well short of their previous highs.
AIB dealt up to a high of 965p before closing up 28p on 958p while Bank of Ireland jumped 55p to £14.70. Dealers said that recent comments on Bloomberg by Bank of Ireland chief executive, Mr Maurice Keane, that Bank was facing tighter margins and lower forex income, had been "misinterpreted" by many and had been largely responsible for the recent fall to £13.50.
Smurfit saw some strong demand on an improved pricing outlook for the industry and an upgrading by Goldman Sachs, resulting in a 9p gain to 225p. JS Corp also benefited on NASDAQ and was up $2.06 on $19.75 as Dublin closed for the day. At this level, JS Corp is at its highest since last October and almost 50 per cent above the $13.50 low of early January. If Wall Street maintained that momentum to the close, then further gains are likely for Smurfit.
CRH also saw renewed demand and closed up 14p on £10.50, Irish Life was 10p higher on 700p, while Irish Permanent was also 10p higher on 940p. Some second-liners, however, lost some ground and Fyffes was 6p lower on 179p, while Clondalkin lost 10p to 740p. Greencore, continued to improve and gained another 6p to 448p as the market showed its approval for the Pauls acquisition.
Other Irish stocks benefited from the strong tone on NASDAQ, and at the Dublin close, CBT was up $0.62 on $51.75 after its excellent results. Iona was $1 firmer on $32.19 ahead of next week's results, Esat was up $1.12, while Elan was almost $1 firmer on $63.75.
