The Irish stock market recouped much of its early losses yesterday afternoon to end the day off 0.38 per cent, buoyed by better than expected US inflation figures. A well-discounted 50 basis point interest rate cut by the US Federal Reserve on Tuesday left the financial markets with nowhere to go and sellers took profits in early trade.

The release of tamer than expected US inflation data around lunch-time indicated that although the market was weak it was not weakening further and this lent some comfort to sentiment in general.

The US consumer price index rose 0.3 per cent against expectations of an 0.4 per cent increase. The core, which excludes the volatile food and energy components, gained an as expected 0.2 per cent. The Irish banks fell victim to a concerted bout of profit-taking in early trade in the wake of their recent bull run but recouped some losses after the US data.

Bank of Ireland ended the day down 43 cents to #11.00 and Allied Irish Banks dropped 23 cents to close at #12.82.

In the industrial sector, CRH benefited from lively demand. The stock gained 22 cents to close at #20.07. Smurfit was generally well-bid but its share price ended very marginally up at #2.23.

Horizon, which issued a profit warning on Tuesday, shed a further 30 cents to #1.89 yesterday. Horizon's share price halved on Tuesday after the company warned lower margins were squeezing earnings during what should have been its most profitable period. The company, which employs a total of 650 people, laid off 30 staff in the UK, with another 30 to follow shortly.