The FTSE 100 staged a partial recovery today after Monday's sell-off, with decent corporate earnings and better-than-expected service-sector data doing their bit to repair damaged market sentiment.

London's benchmark index slumped 100 points yesterday as political uncertainty in the Eurozone resulted in sharp falls across the continent: corruption scandals at Spanish Prime Minister (PM) Mariano Rajoy's governing People's Party and rising support for former Italian PM Silvio Berlusconi pushed bond yields in both nations sharply higher.

However, yields in both countries have fallen back slightly today, while borrowing rates for 'safer' assets - such as those in the US, UK, Germany and France - rose strongly as risk appetite increased.

Stock markets started Tuesday's session in a better mood though after some well-received results from heavyweight companies such as BP, ARM Holdings, Munich Re and UBS.

Gains were cemented by news that the UK services sector returned to growth in January. The Markit/CIPS services purchasing managers' index (PMI) rose to the 51.5 point mark during the month of January, well ahead of the previous month's reading of 48.9 and the strongest reading since September. The consensus estimate had been for an increase to 49.5.

Meanwhile, Eurozone services PMI also beat expectations, rising from 48.3 to 48.6 last month, a 10-month high. Analysts had forecast no change.

FTSE 100: ARM jumps after full-year figures

ARM Holdings reported a 16% rise in profit before tax for the fourth quarter, boosted by demand for the company's processor technology for smartphones and tablet devices. Normalised pre-tax profits for the British semiconductor and software design firm came to £80m for the three months to December 2012, compared to £69m for the same period a year earlier.

Financial services group Hargreaves Lansdown was performing well ahead of its interim results due out on Wednesday. Financials on the whole were wanted as risk appetite increased, with RBS, Lloyds and Schroders making gains.

Even Barclays was in positive territory despite announcing that it has put aside a further £1.0bn for redress in the fourth quarter for mis-selling products.

Profits at oil titan BP slipped in the fourth quarter owing to lower upstream production levels, but the company assured that it well-positioned for growth after moving past "many milestones" last year, causing shares to rise this morning. Meanwhile, natural gas firm BG Group rose despite posting a sharp fall in fourth-quarter earnings on the back of a decline in cargo deliveries.

British Airways owner IAG was flying high after releasing its traffic statistics for January. The company said that group traffic (measured in revenue passenger kilometres) rose 0.7% year-on-year, while group premium traffic increased by 2.7%.

Broadcaster and broadband group BSkyB was out of favour after rival Virgin Media confirmed that cable company Liberty Global is considering bid for the firm, which would put it in direct competition with the FTSE 100 market leader.

Medical technology group Smith & Nephew was lower ahead of its full-year results on Thursday; Panmure Gordon downgraded the stock from 'buy' to 'hold' after the shares surpassed its target price.

Insurance giant RSA was lower after Nomura downgraded the shares to 'reduce' ahead of the group' results on February 20th. After the stock's outperformance since November, the broker said that it doesn't "think there will be an additional catalyst to push the stock more from here". Admiral rose after the same broker named it as its "top pick" in the non-life insurance sector.

FTSE 250: UBM and Victrex lead the fallers

Business published and events organiser UBM was in the red after receiving an offer from Electra Partners to purchase a portfolio of UBM's Data Services businesses, known as 'Delta', for £160m. Nomura kept its 'buy' rating for the stock this morning, but said: "The sale will lead to a dilution of about 11.7% on our estimates, putting the stock at a price-to-earnings ratio of c.13.5x-14x, which could cause short-term weakness before the company begins to provide accretion through events acquisitions, we think."

Telecoms group TalkTalk was lower despite saying that it customer base returned to growth for the first time in three years during he third quarter.

Polymer manufacturer Victrex was a lower after despite saying that the business is showing "resilience in trading" in spite of continuing global economic challenges. The company said that group sales volumes in the four months to January were up 2.0% year-on-year.

Europe-focused industrial property specialist SEGRO gained after completing the disposal of its MPM site in Munich one month earlier than originally planned.


FTSE 100 - Risers
Hargreaves Lansdown (HL.) 734.50p +5.76%
Eurasian Natural Resources Corp. (ENRC) 344.20p +4.52%
ARM Holdings (ARM) 931.00p +4.37%
BG Group (BG.) 1,142.00p +3.44%
Royal Bank of Scotland Group (RBS) 337.50p +2.71%
Vedanta Resources (VED) 1,272.00p +2.50%
BT Group (BT.A) 268.90p +2.24%
International Consolidated Airlines Group SA (CDI) (IAG) 215.10p +2.14%
Lloyds Banking Group (LLOY) 51.48p +1.62%
Schroders (SDR) 1,943.00p +1.57%

FTSE 100 - Fallers
Smith & Nephew (SN.) 707.50p -1.94%
Randgold Resources Ltd. (RRS) 6,155.00p -1.91%
Antofagasta (ANTO) 1,113.00p -1.24%
Xstrata (XTA) 1,150.00p -1.16%
Centrica (CNA) 345.10p -1.12%
Aggreko (AGK) 1,581.00p -1.06%
RSA Insurance Group (RSA) 129.40p -0.92%
British Sky Broadcasting Group (BSY) 809.00p -0.86%
Shire Plc (SHP) 2,136.00p -0.79%
Glencore International (GLEN) 384.20p -0.77%

FTSE 250 - Risers
COLT Group SA (COLT) 113.60p +5.09%
Tullett Prebon (TLPR) 251.60p +4.62%
ICAP (IAP) 338.80p +4.57%
RPS Group (RPS) 238.80p +3.83%
Spirax-Sarco Engineering (SPX) 2,375.00p +3.26%
Bovis Homes Group (BVS) 631.00p +2.94%
Soco International (SIA) 400.00p +2.88%
Supergroup (SGP) 627.50p +2.53%
IG Group Holdings (IGG) 466.50p +2.50%
Jupiter Fund Management (JUP) 337.70p +2.46%

FTSE 250 - Fallers
New World Resources A Shares (NWR) 261.50p -5.83%
UBM (UBM) 740.50p -5.55%
TalkTalk Telecom Group (TALK) 242.00p -4.50%
Debenhams (DEB) 98.50p -2.86%
Petropavlovsk (POG) 343.50p -2.53%
Centamin (DI) (CEY) 62.55p -2.49%
Oxford Instruments (OXIG) 1,709.00p -2.45%
Daejan Holdings (DJAN) 3,040.00p -2.38%
Aveva Group (AVV) 2,155.00p -2.27%
Telecom Plus (TEP) 965.00p -2.08%

BC

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