Despite the gains in London and the strong opening session on Wall Street, Irish share prices drifted lower, with financial shares down sharply after they failed to get any support from a surge in gilt prices. The outcome of the Ecofin meeting over the weekend gave the gilt market a strong boost and prices rose sharply, auguring well for today's auction of £250 million of the new 2008 benchmark stock. Dealers expect the £250 million on offer in the auction to be heavily oversubscribed.

There was a general lack of interest in dealing on the Irish stock market, but the markdown in financial shares does seem a bit overdone, with AIB 8p lower on 555p and Bank of Ireland down 11p on 755p. Irish Life was down 2p ahead of interim results on Thursday while Irish Permanent lost 5p to 600p.

Among the industrials, Kerry gained 10p to 745p with the market for the shares not being affected by the possibility of a rights issue to fund a possible acquisition of the Dalgety food ingredients business. Hibernian was 10p lower on 390p despite an exceptionally strong note from Goodbody which suggested that the share is undervalued. Goodbody set a medium target of 600p for Hibernian.

Elsewhere, Greencore - a likely bidder for Dalgety's flour business - was 2p higher on 327p, Smurfit - trading ex-dividend - was 1p better on 206p while Waterford Wedgwood lost 2 1/2p to 89p. Among the explorers, Gaelic jumped 3/4p to 2 1/2p following the announcement of the European Hydrocarbons deal and a £2.5 million placing and open offer.