Market Report: The Irish stock market gave up its early gains in afternoon trade as a weak start on Wall Street hit sentiment in European markets.

The Iseq index of Irish shares closed just marginally higher, as worries about US interest rates dampened investor sentiment and took the market back from its morning highs. "We were doing well until the Americans came in. That took the gloss off things," one dealer noted.

Tullow Oil was the star performer on the day, gaining 20 pence sterling, or 5.7 per cent, to 373 pence in London, its main market. In Dublin, the shares surged by 31 cent, or 6 per cent, to €5.42 after an update on the Waraga-1 well in Uganda.

The company said tests showed the well had the potential to produce 4,200 barrels of oil a day, significantly more than earlier estimates had suggested. Other strong performers yesterday included Paddy Power, which added 40 cent, or 3 per cent, to €13.40, although dealers said volume in the stock was light.

Kingspan, benefiting from Monday's announcement of the €87 million acquisition of insulation group Xtratherm, added 36 cent, or 2.8 per cent, to €13.41.

DCC also had a good day, gaining 30 cent, or 1.7 per cent, to €18.15.

Kerry Group added 19 cent, or 1 per cent, to €17.20 as the group announced it had kicked off its share buyback with the purchase of 250,000 shares, at a cost of €4.26 million, on Monday.

Despite being cut to a "hold" from "buy" by ABN-Amro, Greencore shares also increased in value by 1 per cent, or four cent, to €3.67. The broker retained its share price target of €4 on the stock.

In the banking sector, most shares gave up their early gains to close modestly higher. AIB firmed by five cent to €18.30, Bank of Ireland gained 19 cent to €14 while Anglo Irish Bank closed five cent higher at €11.40. CRH shares followed the same pattern, hitting €25.20 before slipping back to end the day nine cent higher at €24.99.