SMURFIT and Golden Vale, both companies who are experiencing a decline in fortunes, dominated the Dublin market this week... until yesterday. That was when the shock announcement that Avonmore had made an approach to Waterford Foods grabbed the spotlight.

The move caught the market by surprise and the battle for control is expected to take place over a number of weeks. In a further surprising move, Waterford released its annual results late yesterday, four days ahead of schedule.

The market opened well on Monday, buoyed by rises in London and New York, climbing by more than 1.5 per cent in a rally driven by the main financial stocks. However, on Tuesday they slipped slightly in line with most European stocks as investors waited for a clear buy signal from Wall Street.

On the same day, Golden Vale released its annual results. A collapse in profits in the group's butter and milk business were the main factors in the sharp fall in pre tax profits from £16.5 million to £6.54 million. Although poor, the results were somewhat better than expected. The accounts also showed that the group absorbed a £4.1 million EU superlevy penalty for milk overproduction last year.

The Jefferson Smurfit group also announced its results on Tuesday, unveiling a 52 per cent drop in profits, with a difficult 1997 in prospect. The group made £201 million pre tax profit.

Over capacity is still a problem, particularly in the US where significant levels of stocks have built up, and prices are expected to remain weak. Although the results were in line with expectations, Smurfit shares fell 6p to 162p on the day. On Wednesday they gained 2 1/2p but lost a half penny on Thursday and yesterday to finish the week at 162p.

Volume on the Dublin market was low on Wednesday and Thursday.

As for the next few months, NCB Stockbrokers predict that developments in international markets will restrict the pace of growth in share prices. "We expect the US Fed to raise interest rates by another 25-50 basic points and this will hold back the US equity market," says NCB.

Nevertheless, the brokers say the underlying bias will be upwards. They expect the ISEQ to move to 3,050 by the mid year - the previous forecast was 2,850.

"The second half performance should be stronger," says NCB.

"The tightening of monetary poll in the US will not be aggressive or unexpected. "After this process is complete, the US market can progress from current levels," it says.

Elsewhere, the recent burst of enthusiasm for British stocks seemed, to run out of steam on Tuesday. The big institutions left the field. However, on Wednesday the stocks rose again strongly, responding mainly to Wall Street's late surge on Tuesday evening.

On Thursday, just as the market looked very quiet, a strong push by the utilities came to the rescue. The rise came after a report of a rift between Labour leader Mr Tony Blair and shadow chancellor, Mr Gordon Brown, over the scope and size of the proposed windfall tax on the companies.

Several annual general meetings are taking place next week. They include Fyffes and EBS.