Market Report:The Irish market rebounded in line with its US and European counterparts yesterday after tame US inflation data eased concerns over interest rates.

The positive sentiment pushed the Iseq index of Irish shares up 1.6 per cent, adding €1.7 billion to its value on the day and bringing its gain for the week to €3.4 billion. This follows losses of more than €7 billion last week and comes on the last day of trading under the current regime.

A reweighting of the index in line with the free-float system, which takes into account the number of shares actually available for trading in the open market, takes place on Monday.

Volume was very heavy across most of the index's leading stocks, with few members trading less than 100,000 units.

Ryanair was particularly heavily traded, with 27 million shares changing hands. The stock added 4.7 per cent, or 23 cent, to end the day at €5.16. Dealers said the stock, which has fallen about 18 per cent in the past month, is finding favour again as investors realise that all the bad news is now reflected in the price.

Elan also continued its recent gains, adding a further 4.7 per cent, or 71 cent, to close at €15.86. The biopharma group is continuing to benefit from positive sentiment surrounding its Alzheimer's pipeline.

Elsewhere, Irish Continental Group rose 3.1 per cent, or 65 cent, to €21.50 after the consortium led by Philip Lynch made a long-awaited €560.9 million bid for the ferry group.

The financials were also strong, with AIB and Anglo Irish both closing up 1.3 per cent, at €21.59 and €16.25 respectively. Bank of Ireland added 1.4 per cent, to end the day at €16.15.

Property holding group Blackrock put in a very strong performance, jumping almost 19 per cent, to close up nine cent, at 57 cent.