The Irish Stock Exchange (ISE) had its busiest three months in its history in the first quarter of 2007, with the value of shares changing hands reaching a record €48 billion.

The extremely strong growth in trading activity, which was a 44 per cent increase on the first quarter in 2006, occurred during a period in which the Iseq index of Irish shares reached historically high values, only to see the gains wiped out as a global correction in equity markets took hold.

The average daily turnover of equities in the first quarter of 2007 rose to €749 million, up from €522 million in 2006, according to figures released yesterday by the ISE.

Retail and institutional investors racked up an average of 4,780 transactions a day on the ISE during the period, an increase of 34 per cent.

The first three months of the year was an eventful time for the market. The Iseq index reached a lifetime high, crossing the 10,000 point mark for the first time, while Smurfit Kappa rejoined the index, raising €4.1 billion in a successful initial public offering.

But the Iseq was badly hit when fears about the US housing market led to concerns that the US could plunge into a recession. The Iseq has now fallen back to just below its closing 2006 value.

A global sell-off in equities followed, although analysts characterised it as more of a mid-cycle blip than the beginning of a bear market.

The ISE said the figures emphasised the underlying liquidity of the market.