Dublin report:News that the US Federal Reserve, the European Central Bank and other central banks would co-operate in ensuring market liquidity, boosted sentiment midway through the session yesterday.

Until that point, the pervasive influence had been the overnight fall in the US markets following the Fed's decision to trim interest rates by a quarter-point. By the close, the index was just 12.5 points or 0.17 per cent weaker, having dipped more than 200 points (2.8 per cent) shortly after the session opened.

Banks were among the beneficiaries of the rally, with AIB outperforming in what traders said appeared to be a spate of short covering. More than 5.5 million shares traded in AIB. It closed up 26 cent, or 1.6 per cent, at €16.15.

Anglo Irish Bank also closed in the black, rising 5.5 cent to €11.35.

The more positive sentiment did not extend to Irish Life & Permanent, which continued its poor run ahead of today's trading statement, shedding 38.4 cent, or 2.8 per cent, to €13.356. Bank of Ireland, which had been hit particularly hard in early trading, recovered in mid-session before fading again at the close to end almost 10 cent weaker at €10.60.

Independent News & Media recovered from early weakness after Johnston Press announced weaker advertising sales from its Irish titles. In a subsequent trading statement, IN&M said its advertising revenue had held up well in the second half of the year. The stock closed 16 cent firmer on €2.20.

It was a rough day in the construction sector and building services group Siteserv was among the big losers following its annual general meeting yesterday. It closed eight cent, or 14.8 per cent, weaker on 46 cent.

Grafton was off 22 cent, or 3.47 per cent, at €6.13, while CRH ended 59 cent, or 2.2 per cent, weaker on €26.15.