The Irish stock market is set to regain some of the heavy losses of the past nine months but weak international exchanges are likely to restrict any gains with the ISEQ unlikely to move beyond 5,000 over the next six months, according to Davy Stockbroker in its latest equity market commentary.

This compares with the ISEQ's current level just above 4,800 and its all-time high of 5,447 last March.

This latest forecast is well below the exceptionally positive recent forecast of 6,000 from Goodbody Stock-brokers. Davy analyst, Mr Robbie Kelleher, said that the fall in the ISEQ is almost entirely down to the slump in financial shares.

Among the financial shares, Davy favours Bank of Ireland and Irish Life & Permanent and among the industrials believes that Smurfit, Kerry, Independent, Waterford Wedgwood and DCC "all look to have significant appreciation potential".