Markets up after strong US gains overnight

The Dublin market closed almost 2 per cent higher on what was a good day for European markets. Shares across Europe made significant gains for the first time in more than a week, taking their cue from a strong close overnight in the US, with banks in particular rising amid optimism on bank stress tests.

Almost all stocks on the Dublin market made gains.

Among the financials, Bank of Ireland continued to be the only game in town in terms of volume, but its share price was flat on the day, closing at €0.70. AIB climbed 2.8 per cent but volumes were "anaemic" according to one trader, amidst concern about the level of fundraising needed on the back of the writedown incurred as part of the transfer of the second tranche of loans to Nama.

Construction-related stocks staged a comeback after falling considerably in trade yesterday.

CRH, the largest constituent on the Iseq, rose by 2.2. per cent or 34 cent to close at €15.65. Grafton was one of the best performers gaining 5.7 per cent or 15 cent to finish at €2.82, a correction from yesterday when it lost significant ground for no apparent reason. Kingspan recovered slightly but ended the session a half a percent lower at €5.75.

Elsewhere, airlines had a good day. Aer Lingus rose 3.4 per cent to finish at €0.89 on strong volumes. Ryanair climbed by 3 per cent to €3.95 as the market responded positively to yesterday's figures from the airline and a number of upgradings from analysts.

Pharmaceutical giant Elan was another star performer, rising by 4.4 per cent to €3.88 ahead of results tomorrow. This is despite figures from Biogen which showed that sales of multiple sclerosis drug Tysabri were lower than expected in the second quarter of the year.

Packaging giant Smurfit Kappa also remained in positive territory throughout the day, climbing almost 3 per cent on the day to finish at €7.39 after peer company SCA posted strong growth in packaging volume and price increases.