The Irish stock market outperformed most of its main European counterparts yesterday as a good performance from financial stocks helped it close in positive territory.

Settlement Day: September 17th

Dealers said a research note from Lehman Brothers that downgraded AIB and upgraded Bank of Ireland prompted good activity in the two main banks.

More than five million AIB shares were traded while close to three million Bank of Ireland shares were dealt in Dublin.

Despite Lehman's decision to downgrade its share-price target for AIB to €13.80, AIB closed 11 cents higher at €13.41. Bank of Ireland, on which it set a price target of €13.40, closed 15 cents higher at €11.40.

Anglo Irish Bank was also active, with nearly four million shares changing hands as the stock added 26 cents to €14.93.

Dealers are anticipating a positive trading update from the bank when it releases a promised statement on who is to succeed as chief executive before the end of the month.

Elsewhere, Independent News & Media was active with more than two million shares traded ahead of the publication of interim results today. The shares closed unchanged at €2.07. Volume in Fyffes shares also topped two million but the stock held steady at €1.85.

Kingspan continued to move ahead, adding a further eight cents to €5.63, while Ryanair added one cent to €4.27 despite news that a Belgian regional government has written to the airline asking it to refund €4 million in subsidies.

In London, weakness in mobile phone giant Vodafone hit the FTSE, which ended a two-day rally to close lower.

Vodafone fell by 3 per cent to 129.25 pence sterling after Smith Barney, the research arm of investment bank Citigroup, cut its rating on the mobile phone operator to "sell".

"We still think that the transition from GSM to 3G (third generation) could be difficult for margins," analysts said in a research note.