Markets face an uncertain session today after Wall Street surrendered a sizeable portion of Tuesday's gains, dragged down by profit-taking triggered by fears over the future of US president Bill Clinton as Mr Kenneth Starr, delivered his report to Congress last night.

Financial markets were on edge after the independent counsel delivered the long-awaited report on the investigation of President Clinton's relationship with former White House intern, Ms Monica Lewinsky.

Earlier the Irish market put in another strong recovery in active trading with the index regaining 3.5 per cent to add to the 3.8 per cent recovery on Tuesday. Over the past two days, the market has added almost £3 billion to its value mainly as a result of big gains in the two main banking shares.

But with international markets again looking rocky, there are many who believe that the remarkable recovery over the past few days cannot be justified even though the Irish market was recovering from an oversold position.

One broker said that much of the gains were due to private investors being encouraged into the market for supposed bargains, an investment pattern that led to sizeable private client investment in the leading shares at levels well above their closing prices.

"The punters who sold in the recent slump got out too late and now they're getting back into the market when it's still very uncertain. Unless investors can afford to take losses they should be staying out of this market," said the broker, adding "investors are being stuffed".

The heavy buying in Dublin was triggered by the record overnight gains in the US, but the market seemed to take little notice of the weaker opening session on Wall Street and the fact that Dow Jones futures suggested some sizeable losses in New York. At the close last night, the Dow stood at 7865.02, down 155.76. Leading European stock markets all lost ground as share prices shed 0.61 per cent in London, 1.09 per cent in Paris and 1.23 per cent in Frankfurt. The London share market lost ground as the FTSE index gave up 32.9 points or 0.61 per cent on the day to end at 5311.3 points.

Traders said the market ignored Wall Street's record overnight performance and was concentrating on new upsets in the Japanese economy and today's meeting of the Bank of England's monetary policy committee. The majority of analysts think the Bank of England will hold base rate steady at 7.5 per cent. The London market was affected by Hong Kong's sharp drop, and was again focusing on the continuing Russian political and economic crisis. The Paris Bourse posted a mild gain in the first part of the Wednesday session, but then slipped into the loss column to end the day with a loss of 1.09 per cent, the CAC-40 index standing at 3,762.13 points. The Frankfurt stock market gave up 1.23 per cent on a market that was too cautious to benefit from the dollar's new strength, traders said, but the DAX index managed to stay above the crucial 5,000-point level.