After a lacklustre morning, Irish stocks picked up in the afternoon as markets across Europe rose on renewed optimism that the $700 billion deal to help the troubled US banking sector would be agreed by Congress.
By the close of business, the Iseq was 1.36 per cent stronger as it tacked on 51.25 points to 3,826.18.
For most of the day investors had adopted a wait and see approach to what was happening in the US and volumes were generally light across the board.
Whatever volumes there were today were found in financial stocks. Banks in general were going better in the afternoon across Ireland and the UK as rumours of a possible breakthrough in the US bank refinancing deal gained momentum and dragged stocks upwards.
Anglo Irish Bank was on of the market's better performers, ending the day 4.6 per cent stronger as it added on 18.4 cent to €4.16. Irish Life & Permanent also enjoyed strong gains as it advanced 25 cent to €5.90, a jump of 4.4 per cent in its share price. Bank of Ireland notched up 14 cents – a gain of 3.5 per cent – to €4.09.
While its gains were not as substantial as in the previous two day's trading, AIB continued its upward movement, tacking on 5 cent to €6.4.
CRH was well bid throughout the day and eventually closed 60 cent better off at €16.84, while Kingspan was 4.5 per cent stronger at €6.70.
FBD had a day to forget, with the stock trading down by around 8 per cent at one stage to day before settling at €12.50, a fall of 2.3 per cent, although brokers said this was more a feature of a lack of liquidity in the market than anything else.
C&C, which was has been under pressure of late, saw its share price fall again today as 5 cent was knocked off its value to €2.10.
Falling oil prices benefited airline stocks and Ryanair was 2.4 per cent stronger at €2.52, while Aer Lingus was 1 cent stronger at €1.54.
European stocks advanced for the first time in four days, led by banks and insurers, as investors speculated takeovers may increase and the US Congress will reach an agreement on a bailout plan soon.
UBS, the bank most hit by the subprime crisis in Europe, rallied 5.2 per cent on speculation HSBC Holdings may be interested in buying the company.
RSA Insurance Group surged 11 per cent. Swiss Reinsurance rose 5.2 per cent after saying it has "sufficient" liquidity even when no external funding is available.
Daimler, the world's second-largest maker of luxury cars, gained 3.4 per cent as crude fell for a third day, trading below $105 a barrel.
National benchmarks indices gained in 15 of the 18 western benchmarks. The UK’s benchmark FTSE 100 Index added 2.2 per cent, while France’s CAC 40 Index rallied 2.7 per cent. Germany’s DAX increased 2.1 per cent as consumer confidence in the country for October unexpectedly rose.
Additional reporting: Bloomberg