STRONG demand for the leaders and the better quality second-line stocks drove the market to a new high. And despite an anaemic performance in London and a modest opening in New York, there was plenty of unsatisfied demand from both domestic and overseas investors at the close.

The surge in US bond prices was the main factor driving yield-sensitive financial shares, but Irish Life has benefited from positive research notes from Riada and Merrill Lynch. Irish Life closed up 5p on 252p and seems set to move through its 260p in the next few days.

Bank shares were also firm and AIB closed up 3 1/2p on a new high of 371p, while Bank of Ireland also hit a new closing high of 491 1/2p, a rise of 1 1/2p on the day.

Among the industrials, CRH dealt up 6p to 626p while Smurfit was 1p higher on 167p.

Food shares were mixed, but Avonmore dealt up 9p to 165p on strong demand, while Greencore closed 3p higher on a new high of 339p. Kerry has been the focus of strong bids for the past week and finally found a seller at 625p, 13p ahead of the overnight price.

Elsewhere, Fyffes went better-bid and closed up 1/2p on 102 1/2p after shutting down its loss-making US operations and selling its stake in a Guatemala plantation to Dole for $26 million (£16.25 million). Clondalkin jumped 12 1/2p to 492 1/2p, DCC was 3p higher on 270p after increasing its stake in Allied Foods to 50 per cent, while Independent gained 4p to 319p.

Continued overseas buying drove gilt prices ahead all across the yield curve with gains of 20p to 25p in the five to 10-year area. Dealers noted very strong demand for the five-year benchmark gilt and it will come as no surprise to the market if the NTMA sells some five-year stock through a tap issue.