ABN-Amro remains positive about the Irish equity market and advises investors to remain overweight in Irish shares against a background of likely earnings downgrades in many European markets in the coming months.

AIB and Bank of Ireland are among the stocks being recommended by the broker which has added Smurfit to its buy list to reflect a more positive medium-term outlook for the group and a likely supportive background in the coming months.

ABN-Amro believes Elan will benefit from a favourable backdrop in the US sector which it has lagged for several months while it also likes the look of Viridian, formerly known as Northern Irish Electricity.

However, the stockbroker believes the smaller stocks will continue to struggle. In this sector, its four key recommended stocks are Grafton, Heiton, Abbey and Arnotts. Fyffes and IAWS both make the recommended list in the food sector while technology stocks Esat and Iona are included on its buy list.