The main Dublin shares index inched lower after earlier gains on the back of a European stocks rally but was weighed by a weak Wall Street.

The ISEQ fell 3.42 points to 2,943.83.

European shares hit a five-week high on Tuesday, gaining for a sixth consecutive session, boosted by strong corporate earnings from banks, with UBS soaring after results beat analysts' expectations. The results of European bank stress tests late on Friday helped restore confidence in the sector as it contained no major negative surprises, and showed only seven of 91 banks failed the tests aimed at gauging banks' ability to withstand financial shocks. However, Wall Street shares dipped after disappointing consumer data dented hopes of a strong recovery in the economy.

Ireland's three remaining listed banks put in a good performance with AIB up 2c to E0.97, Bank of Ireland gained 6c to E0.84 and Irish Life and Permanent climbed 7c to E1.64.

CRH was a major gainer on the index despite a depressing assessment of the global construction market from Davy Research. Following a recent trip to the US, the broker said it is increasingly nervous about US infrastructure spend from 2011 onwards: federal spend will be flat; state spend will continue to struggle; and stimulus funds will roll off, it said. "In 2011, we now expect volumes to be flat to slightly positive yoy (original forecast +4pc, PCA forecast +13pc). This breaks down as infrastructure flat to down, non-residential flat and residential +10pc. We now forecast no growth in Europe in 2011 (original forecast +2-3pc) as austerity measures kick in and governments withdraw infrastructure funds."

Shares in CRH rose 2c to E16.50.

Reports say that Kerry Group is planning to open an office (sales) in Chile and that the group may locate a production facility there. Argentina may be a rival for choice of location. Kerry has existing Central and South American plants in Mexico, Costa Rica and Brazil. Chile's population is 17.1m and is projected to grow by 1-1.5pc per year. Shares in the globalised Irish food firm fell 35c to E24.55.

Shares in United Drug edged up 4c to E2.41 ahead of an Interim Management Statement this week. If previous statements are a guide, then UDG will provide an overview of Q3 performance and a comment on the trading outlook for the rest of the fiscal year. Current management guidance is for PBT to be broadly in line with last year on a constant currency basis. Goodbody Stockbrokers have a E5.50 a share price target on Ryanair. It said in a note that the earnings risk bias in its forecasts is upwards, the airline is on the cusp of a material improvement in returns on assets out to 2013 and shareholders are about to receive a E0.34 dividend in a few weeks. It said that the stock is one of the best performing airlines this year. "In fact, post the airlines collapse induced by the volcano, Ryanair has bounced from near E3 on May 25 to near the E4 so has already had a strong performance, though we note that both the sector and Ryanair are up 31pc over the same period," it said. Shares in Ryanair, however, fell 3c to E3.92.