Shares in Ryanair fell by more than 2 per cent despite a 26 per cent rise in first quarter profits and Eircom hit a new low in quiet trading yesterday. Yet the financials made modest gains and Elan rose strongly as the ISEQ increased by 0.75 per cent in a 38.76-point rise to 5,223.70.

Ryanair reported pre-tax profits of €22.7 million (€17.9 million) in the three months to the end of June, though its chief executive, Mr Michael O'Leary, said he was "somewhat cautious" about the general industry outlook. The share dipped 25 cents from €9.50 in early trading before rising five cents to close 2.11 per cent weaker at €9.30.

Long-suffering Eircom fell by 4.18 per cent in a 11-cent drop to €2.52, three cents weaker than its previous all-time low. A decision by its 14 per cent shareholder Telia to lock-in for six months while KPN sells its 21 per cent has given little respite to the stock, which has traded well below its flotation rate of €3.90 for much of its first year on the market.

Drug company Elan, which revealed that it has entered a research programme with Pharmacia Corporation to develop a treatment for Alzheimer's disease, gained 3.24 per cent to close at €60.50, just 50 cents short of the all-time high reached last Friday.

Elsewhere, the financials clawed back some of their losses of a day earlier as bank stocks in London increased after Barclays said it was discussing a takeover of Woolwich.

Bank of Ireland finished eight cents stronger at €6.91 while AIB added 15 cents to close at €9.45 despite continuing uncertainty about the extent of its liability for unpaid DIRT tax to the Revenue Commissioners. And Irish Life & Permanent had another good day, increasing by 3.57 per cent in a 30-cent rise to close at €8.70.

Tech firm Smartforce eased 0.12 per cent in early trading on the Nasdaq to trade at $54 shortly after lunchtime. The company's chairman, Mr Bill McCabe, is expected to resign in a restructuring.