Bank shares soared once again on the Irish market, with AIB and Bank of Ireland drawing heavy demand from overseas investors. But apart from the big financial shares and CRH among the leading industrials, there was little interest in other areas of the market. Second-line stocks, in particular, are beginning to find themselves ignored by investors, who are increasingly focusing on the large capitalisation financials. "It's rapidly becoming a two-tier market," commented one analyst.

The other main feature was huge demand for Esat Telecom shares on Nasdaq on speculation that the Telia/Telenor merger may result in a bid for Esat Digifone by one of the big international mobile phone groups. Telenor has 45 per cent of Esat Digifone, while its merger partner Telia has a stake in Telecom Eireann, parent of Esat Digifone's main rival, Eircell. As the Irish market closed last night, Esat Telecom shares were trading almost $5 higher above $52 (#44.96), an all-time high.

Among the financials, AIB went as high as #18.00 (£14.18) before closing up 30 cents on #17.60 (£13.86). Bank of Ireland put in a storming session and soared 98 cents to #19.70 (£15.52). Other financials were firmer, with Anglo Irish Bank up nine cents on #2.72 (£2.14), Irish Life up 30 cents to #9.30 (£7.32) and Irish Permanent up 10 cents on #14.50 (£11.42).

Dealers dismissed vague talk of bid interest in AIB as the reason for the continued demand for the shares and said index-buyers were still the main reason for the rise in the price. CRH was the only industrial to elicit any serious interest and closed up two cents on #13.82 (£10.89).

Apart from Esat, other Irish stocks to feature on Wall Street included Iona, which dealt up strongly ahead of results due after the market closed.

(# - Euro)