European stock markets shrugged off security worries ahead of the September 11th anniversary, finishing higher as investors snapped up blue-chip stocks.
Volumes were not as bad as some had feared on the eve of the first anniversary of the attacks on the World Trade Centre, despite long-standing worries about possible new violence and of war with Iraq.
"The mood is slightly positive because there is talk that large US institutions are going to ensure that the market will not end down tomorrow," said one fund manager.
Also offering support were buoyant oil stocks such as BP and Shell/Royal Dutch, which added more than 3 per cent each as the price of Brent crude oil hit $29 a barrel after the US Navy warned of a possible Al-Qaeda threat against Middle East tankers.
US markets turned in a more cautious performance than their European counterparts, however. The Dow Jones index of blue-chip shares closed at 8,602.61, up 83.23 or almost 1 per cent, while the tech-heavy Nasdaq finished 1,320.09, up 15.49 or 1.19 per cent.
In Dublin, the stock market gained more than €850 million to close 1.5 per cent, higher although volumes were relatively light.
Most of the gains were down to a strong performance by the four leading stocks. AIB and Bank of Ireland gained 2 per cent and 1.8 per cent respectively.
Meanwhile, building materials group CRH closed 2.3 per cent higher, while Ryanair finished 4 per cent ahead.
But dealers are braced for a dull trading session today as the major US stock markets delay the start of trading until about 11 a.m. in New York or 4 p.m. Irish time, just before the close.
Financial professionals in the US will attend ceremonies for the thousands who died in the hijacked airliner attacks that toppled the Twin Towers.
In London the FTSE 100 closed at a one-week high, buoyed by gains in banking and oil stocks as well as a strong showing from Dixons ahead of the electronics retailer's annual meeting on Wednesday.
French shares gained nearly 3 per cent while in Frankfurt, German shares closed up 1.7 per cent.
However, some strategists continued to preach caution, wary of the still-gloomy outlook for economic growth and corporate profits that has benchmarks ensconced about 14 per cent above the five-year intra-day lows seen on July 24th.
"The feedback we've been getting is that clients are reducing risk, returning to benchmarks, and not taking active sector bets until we get through this," said Mr Saul Henry, pan-European equities strategist at UBS Warburg. "And we're not anticipating a significant pick-up in risk appetite even after tomorrow," he added. - (Additional reporting by Reuters)
