IRISH shares opened the new year with another big gain yesterday, as strong manufacturing data in the United States boosted sentiment on the world's biggest economy.
By the close of trading, the ISEQ Overall Index had surged 2.02pc, or 58.7 points, to reach 2,960.52.
The index shot up from the opening bell, tracking US futures trading which had been bullish overnight, and continued to rise for the rest of the day before peaking at the close.
In percentage terms, the big winner on the session was oil and gas explorer Petroneft, which rose by more than a quarter to 27pc.
It was not the only oil firm to have a good day, however. Dragon Oil rose 1.44pc to €5.56, while Petroceltic jumped 6pc.
Oil prices jumped after Iran threatened a US aircraft carrier if it returned to the Arabian Gulf. The threat sent oil prices up sharply, with Brent Crude jumping 3.73pc in New York to $111.39.
Several food stocks recorded good gains, after a slew of positive forecasts for the sector.
Kerry Group climbed 2.17pc to €28.90 and Glanbia rose 1.19pc to €4.68 after both were picked by Davy Stockbrokers as stand-out shares for 2012.
Speciality baker Aryzta was another winner, adding 0.29pc after Bloxham Stockbrokers said the outlook for the agri-foods sector was positive.
The US manufacturing data sparked a surge across western Europe, where 17 out of 18 markets ended the day in the black.
Germany's DAX Index added 1.5pc, while the UK's FTSE 100 Index climbed 2.3pc. France's CAC 40 Index gained 0.7pc, while the Stoxx Europe 600 Index rallied 1.1pc.
In the US, the Institute for Supply Management's factory index rose to 53.9 last month from 52.7 in November, beating expectations. Construction spending in the world's largest economy increased in November, another report showed.
A separate report on Friday will probably show that hiring in the US accelerated in December for a second month, a sign that the country's improving labour market will bolster consumer spending in early 2012, economists said.
"US data has continued to impress and markets are expecting the trend to persist," Jim Reid, a strategist at Deutsche Bank in London, said.
Carmakers posted the second-best performance of the 19 industry groups on the Stoxx 600 as Polk, a research company based in Michigan, US, predicted that the industry's sales would rise to 77.7 million vehicles this year, helped by a 16pc gain in China to 17.9 million.
BMW rose 4pc as a report said the world's biggest maker of luxury cars expected the automotive market to remain stable in 2012, with growth opportunities in the US and China.