TRADING was busy in Dublin yesterday with the ISEQ index ending 0.87 per cent higher and again approaching March's all-time high. Brokers reported strong two-way interest from investors, with sentiment supported by the strong performance of international markets and particularly the strong rally in New York, where moderate employment cost figures sent bond and share prices rising.

Some of the heaviest dealing was in the bank stocks, with AIB adding 4.6p to 461.6p and Bank of Ireland up 7p to 684p. Irish Permanent, meanwhile, rose 2p to 605p.

The bank stocks remain supported by a rising gilt market. The Dublin gilt market rose in late trading following the US figures, after a weak opening. However short-dated gilts in Dublin were hit by interest rate concerns and a rise in inter-bank-rates, and investors will be closely watching the Central Bank's reaction to currency movements in the weeks ahead.

Despite these concerns, gilt prices still ended higher across the board yesterday and yields fell. Five-yields closed at 5.89 per cent, down from 5.989 per cent, while the benchmark 10-year yield dropped from 6.691 per cent to 6.631 per cent.

Elsewhere, there was reasonable volume trading in some of the other leading stocks. CRH ended 3p higher at 640p, while Smurfit also added 3p to 163p.

In the food sector, Greencore continued to benefit from the agreement with the Irish Farmers Association on beet prices. With the deal likely to be approved by farmers, the shares traded as high as 340p yesterday, before closing 5p higher on the day at 335p.

Meanwhile Golden Vale traded unchanged at 65p with news that Mr Dermot Desmond's IIU had increased its stake to 8 per cent coming too late to affect sentiment. With no news on the bid from Avonmore - whose corporate advisers are expected to reply to Waterford Food's queries later this week - the Waterford share price firmed just 1p to 90p, indicating that the market is still far from convinced that the deal will go through.

The only other corporate news of note was the Ryan Hotels results. While these were a little ahead of market expectations, the share still slipped half a penny to 44p. Meanwhile Qualceram, the market's new entrant, ended unchanged at 173p. Hibernian rose 5p to 320p, while Fyffes added 1p to 97p