The Dublin market gained this morning as financials buoyed the index, in line with European trends.
By 1.12pm, the Iseq was up about 1 per cent, gaining 31 points to 3,055. This mirrored gains in Europe, where financials gained after talks on US banking reform broke down, lowering chances of a broad overhaul of US financial regulation.
Irish financial shares showed similar strength, with Bank of Ireland gaining 6.6 per cent by 1pm to €1.25. Irish Life and Permanent gained 4.1 per cent to €3.32.
AIB, meanwhile, showed smaller gains, adding 1.42 per cent to €1.42. The bank yesterday successfully issued €3 billion of senior guaranteed funding, which traders said was well received.
Aer Lingus rose to 60 cent, a 3.4 per cent gain.
There were few losers on the index this afternoon. However, Paddy Power slipped 0.38 per cent to €22.85, while McInerney was down 6.6 per cent to just under 17 cent.
Elsewhere in Europe, the pan-European FTSEurofirst 300 index of top shares was up 0.5 per cent at 1,061.17 points by 1135am.The index, which gained around 26 per cent in 2009, is only up 1.4 per cent so far in 2010.
Banks added the most points to the index. Lloyds Banking Group, Barclays, UniCredit and BNP Paribas gained 1 to 3.6 per cent. "The banks in Europe have been the main focus of attention so far. The banks led the charge higher in the US last night after bipartisan Senate talks over financial regulation broke down," said Joshua Raymond, market strategist at City Index.
"This could have a significant affect on the way banks seek to make money and so the breakdown in Senate talks is being seen as a positive for bank stocks."
Senate Banking Committee Chairman Christopher Dodd warned that time was running out to pass legislation this year. He said he would unveil his own bill on Monday and aim to get it to the Senate floor by Easter. Some analysts now question whether Congress can complete work on reforms this year.
Other financials were also in favour. Insurers, Hannover Re , Generali and Axa were 1 to 2.3 per cent higher.
Norway's Yara International ASA rose 5.7 per cent after it shied away from raising its offer for Terra Industries Inc to top a rival bid.
Pay-TV company BSkyB was up 2 per cent after traders cited talk that Rupert Murdoch may take the British satellite broadcaster private. BskyB said it had no comment to make on market talk.
German salt miner K+S was 1.9 per cent higher, recovering from the previous session's hefty losses, after rival Potash Corp of Saskatchewan raised its earnings forecast, citing a rebound in demand.
On the downside, Roche Holding AG's fell 2.1 per cent after its Avastin drug did not help men with late stage prostate cancer live longer in a clinical trial.
Italian oil and gas group Eni SpA lost 1.6 per cent after it cut its production growth target, as analysts had expected, and said investors would have to wait until 2011 to see any growth in output or dividends.
In economic news, euro zone industrial production in January recorded its biggest monthly increase on record and figures for December underwent a radical upward revision, pointing to stronger-than-expected economic recovery.
Across Europe, the FTSE 100 index was up 0.3 percent, Germany's DAX gained 0.6 per cent and France's CAC 40 was up 0.5 per cent.
Additional reporting - Reuters