European and US stock markets edged back into positive territory yesterday, a day after heavy losses triggered by the Madrid bomb blasts.
However, with the identity of the bombers still unknown, the tone in markets remained nervous.
The FTSE Eurotop 300 index, which tracks the region's top 300 blue-chips, recovered from an early slide to end 0.3 per cent higher, ending a three-day losing streak.
Shares on Wall Street were led higher by big technology stocks such as Dell and Cisco. The Dow Jones Industrial Index closed 1.1 per cent higher at 10,240.08.
However, the tone was still jittery as the world waited to see whether the Basque Eta group or Muslim militants were behind the attacks in the Spanish capital. This nervousness added to concerns, evident earlier in the week, about the momentum of the recovery - particularly in the US, where recent economic data have been mixed.
The Irish market lagged its counterparts a touch yesterday, finishing just less than 0.5 per cent lower than Thursday's close.
Dealers said "bottom fishers", or investors who buy when shares are low, had helped to buoy the index in afternoon trade. Stocks that had lost ground in the previous session, such as Elan and Anglo Irish Bank were among the biggest winners.
Ryanair continued to be punished along with the rest of the travel sector, as concerns grew that nervous travellers would cancel trips. The airline was down almost 3 per cent at €4.65 by the close.
In Madrid, where blue-chips fell by 1 per cent or more, Spanish airline Iberia was also close to 3 per cent weaker.
British blue-chips clawed back a 70-point loss to end positively, as investors looking for value found it in miners, telecoms and banks. The FTSE 100 closed up 0.5 per cent but was still well down on the week.
"There is a discount in these markets for terrorism," said one Dublin dealer.
"Yes it gets negative when it happens but then it bounces back," he added, predicting that shares would open positively on Monday, unless there was further surprise news about the Madrid bombing, or signs that the terrorist threat could spear.
Other traders said the markets had been in retreat before Thursday's blasts as a year-long bull run had started to lose steam.
"The pullback would have happened, but the things happening in Spain exaggerated the mood," said one US-based dealer.
"This is a pause. It's the four-year anniversary of the peak in the Nasdaq, and one-year anniversary from the start of the bull run and so, psychologically, people take money off the table.
The "flight to quality" exacerbated by the bombing pushed up bond prices and sent yields down close to their lows for the past year.
The US Treasury 10-year yield lipped to 3.7 per cent and euro-zone yields fell to eight-month lows.
