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Two main banks lead the way

IRISH shares gained yesterday, led higher by Petroceltic and the two banks which will form the twin pillars of the Government's new banking strategy.

The ISEQ closed up 0.4pc at 2,952.28 points in Dublin, led higher by Petroceltic, which said that it had found a partner in Algeria. The long-anticipated announcement came as the company also said it was pulling out of Tunisia. Shares in Allied Irish and Bank of Ireland jumped more than 9pc as the markets continued to cheer the stress tests.

Shares in Irish Life & Permanent had another torrid session, plummeting 25pc to 13c to make one of the country's most widely owned shares almost valueless.

Ormonde Mining was up 8.4pc to 12c after a subsidiary bought a 10pc stake in a tungsten company. Abbey added 2.5pc to close at €5.20 after the house builder said it had bought back 50,000 shares.

The buoyant mood in Dublin was reflected in most other bourses and most European stocks rose, extending a three-week high for the Stoxx Europe 600 Index. Among the deals helping sentiment was French chemical maker Solvay's decision to buy Rhodia for €3.4bn. Rhodia surged 48pc in Paris trading, its biggest increase on record.

The Stoxx 600 rose 0.1pc to 280.26 at the 4.30 pm close in London as three stocks gained for every two that fell. The gauge has advanced 6.9pc from this year's low on March 16 amid speculation the economic recovery will withstand Japan's worst earthquake and revolts in the Middle East and north Africa.

Mislav Matejka, head of European equity strategy at JPMorgan, said: "We believe the market could surprise by its resiliency. We remain constructive on equities and continue to advise buying any dips."

Rio Tinto climbed 1.3pc after analysts at Nomura Holdings said the world's third-largest mining company may double a share buyback plan to $10bn after purchasing $800m of stock, or 16pc of the programme announced in February.

In New York, the S&P 500 met tough resistance as investors waited for a rake of quarterly earnings reports. Investors were cautious against a backdrop of geopolitical risks that have weighed on equities for months. The benchmark S&P 500 hovered near 1,333. The level is double the 12-year low hit in March 2009 and not far from 1,344, the S&P's highest since June 2008.

Bruce Zaro, chief technical strategist at Delta Global Asset Management, said earnings season would likely push the S&P 500 to 1,400 by mid-May as stocks come off the seasonally strong November-April period. On Friday, the S&P recorded its best two-week period since December, and the Dow industrial hit their highest intraday level since June 2008. Encouraging jobs data helped cement hopes of a labour recovery.

Irish Independent