Settlement Date: March 20th: The stock market surged by 1.6 per cent yesterday, lifted by another strong performance on European equity markets.

Dealers said the serious activity was confined to the leading stocks, most of which logged strong gains.

Irish Life & Permanent and Ryanair again proved the stars of the show. The life insurance group added 45 cents, or nearly 5 per cent, to 9.70, while Ryanair was up by 52 cents, or more than 9 per cent, to 6.05.

The day's biggest loser was Elan, which lost 79 cents or 25 per cent of its value, to 2.33 as the shares were hit by fears that a US Federal Trade Commission investigation could derail its planned $850 million sale of two drugs to King Pharmaceuticals.

There was heavy trading in Bank of Ireland shares, with close to 9.4 million shares changing hands, as the stock gained 14 cents to 9.63. The bank confirmed it had been in the market again on Thursday, mopping up one million shares at a price of 9.52 per share.

There was also good volume in AIB shares, with 4.7 million traded as the stock added 12 cents to 12.90.

Other beneficiaries of the rally included CRH, up 29 cents to 13.14, DCC, which added 35 cents to 9.65 and Jurys Doyle which gained 25 cents to 6.70.

United Drug also added 40 cents to 12.90. Kerry Group was up by 15 cents to €11.80 despite news that its chairman, Mr Denis Brosnan, had sold 100,000 shares at a price of 11.72 on Thursday.

Dealers reported good demand for Grafton shares, which closed 12 cents higher at 3.02.