The market raced ahead yesterday, fuelled by strong demand for the financial stocks and buoyed by the record-breaking performance of the London Exchange. Britain's FTSE 100 index faltered on the brink of 5,000 points and eased off the day's best levels to end at a new closing high of 4,964.2, up 64.9 points but off the day's best and all-time peak of 4,991.8. The ISEQ closed up almost 50 points at 3576.95.

The star performer of the day was AIB whose stock rose 26p, to close at 590p, pushing the capitalisation of the bank to £5 billion. Strong overseas demand for the stock saw it rise at one stage to 597p.

Bank of Ireland was up 14p at 820p and is just 2p short of seeing its capitalisation rise to £4 billion. Dealers said the banks were tracking the British banks which have seen their share prices rise considerably this year.

Irish Permanent was up 13p on the day and dealers said it had been pulled up by strong sentiment being shown for banking stocks.

Irish Life's share price finished up 2p, on its previous close. Dealers said the news that it had successfully bid for a majority stake in Hungarian Bank, Kereskedelmi es Hibelbank, came too late to affect its share price.

The bid was for £66.7 million from a consortium of Irish Life and the Belgian Kredietbank and it beat a rival bid from Bank of Ireland. Trading was active in Smurfit shares with the stock finishing up 5p at 215p. One dealer said US box shipment figures were up 5.7 per cent and stocks were down and this had helped sentiment towards the share.

CRH was down 5p at 675p. "Cement is not doing well, it looks a bit expensive," one dealer commented.

Avonmore's share price was unchanged, but Waterford Foods was up 5p at 160p. Kerry's share price was up 7p at 615p but at one point it rose to 620p before dropping back. Greencore gained 5p on the day to close at 325p. IWP's share price slipped 12p to finish at 300p.