After a stuttering start this morning, the rally in Irish shares gathered pace on the back of better than expected results from Citi Group and a feeling that some UK housebuilding stocks may have "bottomed out".
By midday the Iseq was up 2 per cent. Afternoon trading saw more big gains by Irish stocks with the Dublin market closing 4.7 per cent stronger as it tacked on 220.68 points to 4,894.47.
After an ugly end to last week and nightmare start to this week, the Iseq has now posted strong gains for three days in a row. But given the volatility of markets, traders are remaining cautious.
Once again, banks were the big movers, with Irish Life & Permanent's share price rising by a massive 21.28 per cent as it gained 99.5 cents to €5.67. Anglo Irish Bank also saw a big surge in its share price as it closed the day nearly 14 per cent, or 65 cents, stronger at €5.40.
The other two banks posted less impressive gains, with AIB up just under 4 per cent to €8.50 and Bank of Ireland up 3.3 per cent at €5.57.
Some brokers said that the sheer scale of the banks' recovery could in part suggest short covering, with short sellers being forced to formalise their positions.
Again, the decline in oil prices - down 10 per cent over the week - is having a positive impact on business sentiment, particularly among airlines.
Ryanair's shares climbed strongly today in line with other European airlines such as Air France, which was up 4.7 per cent, and British Airways which was up 6.5 per cent. The low fares airline gained 27.5 cents as its share price soared by more than 9 per cent to €3.225.
Construction stocks also saw huge gains. CRH's share price closed the day more than 10 per cent stronger, as it added on €1.65 to €17.65. Shares in Kingspan rose by nearly 12 per cent to €6.705, while Grafton tacked on 28 cents to €3.28, a gain of just over 9 per cent.
Overall, European stocks rose, capping the first weekly gain since May, after Citigroup's smaller- than-estimated loss outweighed disappointing earnings at Merrill Lynch and Microsoft.
National benchmark indices increased in all 18 western European markets, except Denmark and Norway. The UK's FTSE 100 gained 1.7 per cent. France's CAC 40 climbed 1.7 per cent, and Germany's DAX advanced 1.8 per cent.