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"Ireland has finally bitten the bullet and officially applied for a loan from the EU/IMF," said analyst Bernard McAlinden at NCB Stockbrokers in Dublin.
At the same time, McAlinden noted that "there are no details on how much has been requested, the terms of the loans or the conditions attached to such a loan."
Dealers said that as time goes on, the markets will focus more on the terms and conditions, trying to get a fix on whether solving the Irish problem will ease wider concerns over the eurozone.
The euro surged above $1.37 on the foreign exchange market, striking as high as $1.3786 in response to the news.
The London stock market jumped 0.43 per cent, Frankfurt gained 0.52 per cent and Paris put on 0.55 per cent.
Dublin added 0.55 per cent as the once-proud Celtic Tiger nation was forced into the eurozone's second emergency rescue this year.
Irish Prime Minister Brian Cowen said Sunday his government had applied for aid from the EU and the IMF.
While the amount had not yet been decided, he said it would be less than 100 billion euros ($137 billion).
"On Sunday, the Irish government and the troika (of EU Commission, ECB and IMF) announced that the outlines of a bailout for Ireland have been agreed in principle," Citi analyst Juergen Michels said.
"This was choreographed as a request for financial support from the Irish government with immediate statements from European partners and the IMF which welcomed the request, stating that a final agreement of the package would be available within the next few weeks."
Barclays Capital analyst Giulia Comotti said the bailout request had been widely expected amid mounting speculation over the perilous state of Ireland's public finances.
"The euro received support from the announcement that EU finance ministers have agreed to a request from Ireland for financial aid," said Comotti.
"However, this had probably been priced in already by the markets in the past few days before the announcement."
The euro and equities have faced heavy selling pressure in recent weeks due to the debt woes of Ireland and other struggling eurozone nations such as Greece, Portugal and Spain.
Debt-riddled Ireland is the second eurozone country to seek an EU/IMF bailout in just six months after Greece was rescued in May with 110 billion euros.
"Ireland remains centre-stage," said Credit Agricole CIB analyst Daragh Maher, who also warned that markets were not yet aware of the strings that would be attached to the deal.
"A request for aid is different from delivery, so there may be some uneasiness in the market early in the week if there is some intensification in the rhetoric surrounding the terms and conditions of the bailout," added Maher.
Later this week, the Irish government was expected to deliver a detailed plan to slash spending and raise taxes as the crisis-hit nation struggles to balance the books.
The four-year plan will aim to make 15 billion euros of budget savings by 2014.
Many analysts remain sceptical that an Irish bailout will resolve the eurozone debt and deficit crisis.
"Confirmed details of the EU and IMF's joint bailout for Ireland have given a boost to risky assets at the opening of the new week but the structural issues facing the eurozone's periphery are long-term in nature and will not be resolved overnight," said Altium Securities analyst Ian Williams.
"Equity investors should, at least, regain some of the confidence that was shaken temporarily in recent days."
Market concerns persist that the eurozone crisis could spread to other debt-laden nations -- with Portugal and Spain possibly next in line.
"Ireland may have accepted a bailout this weekend but the eurozone’s debt crisis is far from over," said research director Kathleen Brooks at trading site Forex.com.
She added: "Portugal and Spain -- and maybe even Italy -- have very high debt burdens and may eventually have to use the European bailout fund to access finance."
"Portugal's finance minister has said that if Portuguese bond yields spike above 7.0 per cent then it is unsustainable for the government to borrow in the capital markets. Portugal's yields are currently 6.72 per cent -- so very close to that threshold.
"So, Ireland is just another chapter in the eurozone's sovereign debt crisis and is not the end of the story."
She added that Greek bond yields remained at "elevated levels" which suggested that the EU/IMF bailout earlier this year had not solved the nation's debt crisis.
Asian stock markets mostly rose on Monday on news of Ireland's bailout and reviving confidence in Japan, although sentiment in Hong Kong was hit by new measures to cool the property market.