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Europe gains but ISEQ falls back

IRISH shares dipped slightly yesterday while shares elsewhere in Europe rose to a 15-month high, buoyed by the news that Cadbury has agreed to be bought by Kraft Foods.

National benchmark indices increased in 12 of the 18 western European markets. The ISEQ slipped 6.59 points, or 0.2pc, to 3101.58 points.

Elsewhere, the UK's FTSE 100 advanced 0.3pc, Germany's DAX rose 1pc and France's CAC 40 added 0.8pc.

The biggest gainer in Dublin in percentage terms was tiny Conroy Diamonds, which soared 23pc to 8c after it reported positive drilling results in Clay Lake the previous day.

McInerney Holdings extended recent gains, advancing 2.6pc to 20c on hopes that UK property prices are rising again and commercial property is selling better than last year.

However, Bank of Ireland fell 2.3pc to €1.48. The bank, which has now fallen in seven out of the past eight sessions, said yesterday it wouldn't make coupon payments due early next month on some securities as the European Commission weighs the bank's viability plan.

The Dow Jones Stoxx 600 Index, which tracks a basket of European stocks, rose to a 15-month high on optimism that the worst is over and corporate activity will pick up.

The big talking point was Cadbury's acceptance of an improved £11.9bn takeover offer from Kraft. Cadbury climbed 3.6pc to 836.5 pence after agreeing a deal whereby investors will get £8.40 a share, including £5 in cash and the rest in stock. Cadbury will also pay its holders an additional 10p dividend once the offer is unconditional.

Burberry, the UK's largest luxury retailer, rallied 8.3pc after it reported third-quarter sales that beat estimates and said full-year profit will be "towards the top end" of analysts' forecasts.

Pharma giant Sanofi-Aventis led healthcare stocks higher on speculation that the Republican Party in the US will block an overhaul of the industry if they win a Senate election for the late Ted Kennedy's seat.

"Investors returned to the market in force on Tuesday on hopes that Obama's healthcare overhaul may hit a wall if Republican Senator Brown wins the Senate seat," said Joshua Raymond, a London-based market strategist at City Index.

He added: "If he did, Republicans in the Senate could then stagnate Obama's healthcare plan."

Finland-based Waertsilae Oyj, whose ship motors propel one in three of the world's vessels, surged 13pc to €33.83 after announcing a plan to cut 1,400 jobs and shift some manufacturing from Europe to China. Two propeller and component-manufacturing plants in the Netherlands and another site in Finland will close.

Alstom SA dropped 2.5pc to €52.76 after the world's second-largest train maker reported third-quarter sales that fell short of analysts' estimates.

Irish Independent