The Iseq started the week in positive territory with investor sentiment bouyed by the emergency rescue package agreed today to stabilise markets.
The European Union agreed on a €500 billion emergency fund in the early hours of this morning to protect highly indebted euro zone countries from the "wolfpack" of financial markets.
The deal has soothed markets around the world and encouraged investors to buy equities and riskier emerging market assets.
At 2.20pm the Dublin market was up over 7 per cent or 214.42 points to 3197.13.
Shares in AIB were up 27 cents to €1.39 while Bank of Ireland was up 29 cents to €1.71. Irish Life & Permanent was up 41 cents to €2.71.
World stocks rose nearly 3 per cent, while the euro gained 2 percent on the dollar and corporate and peripheral debt yields narrowed sharply against benchmarks.
At 09.00am, the FTSEurofirst 300 index of top European shares was up 5.5 per cent at 1,021.00 points -- the biggest daily percentage gain in 17 months and bouncing back after hitting a seven-month closing low on Friday. It fell 8.9 per cent last week, its worst weekly performance since November 2008.
Financial stocks were the top gainers, with the STOXX Europe 600 banking index jumping 12 per cent. Allied Irish Banks, Banck Santander, Standard Chartered, Barclays, Lloyds, Royal Bank of Scotland, Societe Generale and Credit Agricole surged 9.6 to 26.7 per cent.
Across Europe, Britain's FTSE 100 index gained 4.1 per cent, Germany's DAX rose 4 per cent and France's CAC 40 surged 7.2 per cent, but the biggest gains were made in Spain, Greece, Italy and Portugal, with the IBEX up 11 per cent, the ATG up 9.5 per cent, the MIB up 8.7 per cent and the PSI 20 up 8.8 per cent.
Additional reporting: Reuters