DUBLIN REPORT:A MASSIVE SURGE in Irish Life & Permanent's share price helped to propel the Iseq firmly into positive territory for the third successive day, writes Ciarán Brennan.

In line with other markets, Irish shares gathered pace on the back of better than expected results from Citigroup and a feeling that some UK housebuilding stocks may have "bottomed out".

A 10 per cent drop in oil prices over the past week is also adding to positive sentiment.

By noon, the Iseq was up 2 per cent and afternoon trading saw more big gains by Irish stocks, with the Dublin market closing 4.7 per cent stronger as it tacked on 220.68 points to 4,894.47.

Once again, banks were the big movers, with Irish Life & Permanent's share price rising by a massive 21.28 per cent as it gained 99.5 cent to €5.67. Anglo Irish Bank also saw a big surge in its share price as it closed the day nearly 14 per cent, or 65 cent, stronger at €5.40.

The other two banks posted strong, but less impressive gains, with AIB gaining just under 4 per cent to €8.50 and Bank of Ireland up 3.3 per cent at €5.57.

Some brokers said the sheer scale of the banks' recovery could in part suggest short covering, with short sellers being forced to formalise their positions.

Falling oil prices helped to boost European airline stocks and Ryanair was among the gainers. It gained 27.5 cent as its share price soared by more than 9 per cent to €3.225. Aer Lingus tacked on 10 cent as its climbed by nearly 8 per cent to €1.37.

Construction stocks saw huge gains. CRH's closed the day more than 10 per cent stronger, adding on €1.65 to €17.65. Shares in Kingspan rose by nearly 12 per cent to €6.705, while Grafton tacked on 28 cent to €3.28, a gain of just over 9 per cent.

Dragon Oil was the big loser as it lost nearly 12 per cent to €4.30.

Iseq: 4,894.47 (+220.68) Settlement date: July 23rd