Market Report:There appeared to be light at the end of the tunnel yesterday as gains in US stock markets helped reverse declines in Europe, though traders were quick to warn that the volatility remains.

In line with its European counterparts, the Iseq index of Irish shares headed downwards, trading as much as 2.2 per cent lower at one point, before rallying towards the end of the day and closing down just 0.6 per cent, at 8,376.07.

Anglo was the biggest loser amongst the banks, closing down 1.6 per cent, or 22 cent, at €13.78, though it was more of interest because of the large number of shares traded.

More than 7 million units changed hands in Dublin, with a further 7.8 million trading in London. The shares have been busy for several days now and it is believed that much of the buying has been done by Seán Quinn. The Co Cavan-based billionaire is already estimated to own between 4 and 5 per cent of the company, though because the shares are held in a variety of different vehicles he is not required to inform the market. Yesterday's purchases and those made earlier in the week are believed to have been in the form of contracts for difference.

Elsewhere the other financials fared slightly better, with Bank of Ireland actually closing up 1.7 per cent, or 10 cent higher, at €13.70. Earlier in the day it had been down more than 4 per cent.

Positive results from Smurfit Kappa failed to excite the market, with shares dropping 3.8 per cent, or 63 cent, to end the day at €15.56. Dealers said investors had been disappointed at the lack of an upgrade in the group's full-year guidance.

Grafton lost some of the gains it made on Tuesday, falling back to close down 1.9 per cent, or 19 cent, at €9.80, though volume was light.