The stock market added another £425 million in value yesterday as money continued to pour into Irish shares, particularly financial shares and smaller stocks with exposure to the Irish economy.

Although the British market ended just two points higher and the Dow got off to a soft start, Irish equities shrugged off the weak international backdrop to gain another 1.6 per cent on top of Monday's 3.35 per cent and close 68.85 points higher at a record 4,259.45.

Traders said domestic institutional holders were reluctant to sell their shares and overseas investors were keen to buy, particularly in light of the pound's weakness, so anyone wanting stock had to pay up for it.

"We are halfway toward our full-year target for the market already. You couldn't get a more bullish scenario, particularly for financial shares," one trader said.

Dealers said that, in addition to a rapidly growing economy, interest rates were set to fall in the run-up to Economic and Monetary Union (EMU) while the pound was effectively being devalued at present, all of which should have a positive impact on corporate profits.

Financial shares were again the main beneficiaries, particularly Irish Life which has lagged behind the main banking stocks of late. It gained 241/2p to 4321/2p, an all-time high, with dealers reporting that five million shares changed hands at a price of 431p.

The recent strength of the bond market has made the yield on Irish Life look attractive, while dealers said there was some muttering about the company being a possible takeover target given the strength of its franchise in the Irish market.

AIB, which broke through the £6 billion market capitalisation barrier on Monday, continued its foray into record territory by gaining another 12p to close at 744p in a late sterling deal while Bank of Ireland added 10p to 1160p and Anglo Irish firmed 4p to 145p.

Industrials also had a good day with building materials group CRH firming 8p to 855p while Smurfit was up 4 1/2p at 208p.

Second-line stocks in demand included Grafton, up 25p at 1325p, property group Green, up 7p at 397p and Kingspan which gained 6p to 240p while Ryanair firmed 15p to 355p.