Steady gains in London and a shortage of offers were the main factors behind another excellent day for the Irish market, with the index up over 2 per cent and up nearly 5 per cent on the week.

Demand for the banks and CRH was again the mainstay for the market, and although trading volumes are thin, dealers believe that further gains are in the offing between now and the holiday break-up on Christmas Eve.

AIB, Bank of Ireland and CRH are all virtually certain to be included in the key Euro indices next year and that partly explains the overseas demand for the stock. Bank of Ireland jumped 40p to £14.70, AIB hit an intra-day high of £11.50 before closing up 5p on £11.30, while CRH hit another new high with a 35p jump to £12.35 after peaking earlier at £12.50.

The big gains for AIB and Bank of Ireland are also filtering down to the other financials and Anglo Irish Bank jumped 18p to 190p with a view in some sections of the market that Anglo is a stock to watch in 1999.

Irish Permanent gained 30p to £10, while merger partner Irish Life added 5p to 610p. The recent rise in the Irish Permanent share price has meant that the notional value of the merger has risen from £2.8 billion at the time of the announcement to £2.9 billion.

Elsewhere, Independent continued to improve after its announcement of a major restructuring and was 20p higher on 260p. Other second-liners which have lagged the market in recent weeks also improved, with DCC up 20p to 580p and Fyffes 7p firmer on 137p. Smurfit was 2p higher on 118p but is finding it increasingly difficult to break out of a narrow trading range around that closing level.

Among the explorers, the rump of the Providence rights issue was placed in the market at the rights price of 1p after shareholders other than those associated with Tony O'Reilly gave the cash call a lukewarm reception. Providence shares closed in the market on 1 1/2 p. Ovoca continued to trade wildly in small volumes and was 7p higher on 42p.

Esat was the star Irish stock on NASDAQ and was trading $3 3/4 higher on $38 3/4 as the Irish market closed. Esat is a notoriously volatile stock and 10 per cent movements in the price are not unusual. Iona was another in good demand and was trading $1 1/8 higher at $34 5/8 as Dublin closed down for the night.