The Dublin market has stormed ahead with the ISEQ Index up by more than 2 per cent at close of business. Bank shares once again led the charge with the financial index up by over 3 per cent to 8,471.65.

The rally came on the back of a boost in London prompted by a stronger than expected performance by Lloyds TSB Bank. The City set the tone for the day with Irish banks quick to follow their ascent.

A weak opening on Wall Street threatened to dampen the high spirits for a period but a late rally by London's financial sector underpinned strong increases in Dublin.

The two main banks were the focus of attention for most of the day with both making good gains. AIB rose by 30 cents, rising from €15.90 (£12.52) to €16.20 (£12.76) on the back of investor interest in the shares ahead of its 1998 pre-tax profit figures due on Wednesday. Analysts expect the bank will show around a 40 per cent increase in profits on the back of strong growth in the economy.

Bank of Ireland shares also climbed higher, rising from €17.80 (£14.02) to €18.60 (14.65). The bank has been undertaking an extensive investor relations roadshow in Britain this week, triggering an upsurge in demand for the shares.

Among the other financials, Anglo Irish Bank added 4 cents to €2.54 (£2.00), Irish Life rose from €8.53 (6.72) to €9.10 (£7.17) and Irish Permanent increased from €13.85 (£10.91)to €14.45 (£11.38).

Outside of the financials, the other leading stocks accounted for the rest of the day's activities. CRH was in strong demand, with the shares moving up from €16.15 (£12.72) to €16.36 (£12.88). US institutional interest renewed its interest in Smurfit, helping the shares to progress from €1.63 (£1.28) to €1.72 (£1.35).