Stocks trimmed gains on Friday afternoon on the back of ongoing developments in Cyprus as politicians desperately scramble to come up with a 'Plan B' to raise the funds needed to secure financial assistance from the Troika.
Nevertheless, markets maintained their positive bias on hopes that a deal can eventually be made.
"Given the uncertain headlines continuing to come out of Cyprus, Europe's markets have remained remarkably resilient to the swirling cross winds of news flow coming out of the beleaguered country," said Senior Market Analyst Michael Hewson from CMC Markets.
"Whispers of possible deals in the next few hours has helped buoy sentiment heading into the weekend, however history has taught us throughout this crisis it would be premature to break out the bunting and champagne quite yet. As with a lot of the optimism that emanates from the euro area the champagne soon ends up going rather flat."
Gains were trimmed in afternoon trade after Cypriot Finance Minister Michalis Sarris confirmed that Cyprus is considering bringing back the plan to tax customer accounts despite the controversy that it has stirred earlier this week.
Sarris was quoted as saying: "I think that is clearly on the table, that is something that needs to be discussed to see whether a levy on deposits of some sort [...] would make a contribution to finalising the package."
Also pressuring stocks late on were reports that the Troika has increased the amount it wants Cyprus to raise from €5.8bn to €6.7bn.
FTSE 100: BT gains after Nomura comments
Telecoms giant BT Group was a strong riser after Nomura raised its target price for the stock from 290p to 360p and kept its 'buy' rating. "Regulatory rhetoric is turning positive for all of Europe's network owners, but the benefits should prove more tangible for fixed networks and highly significant for BT, in our view," said analyst James Britton.
Oil giant BP also rose after saying that it intends to carry out a share repurchase programme with a total value of $8.0bn. The decision to buy-back shares
follows the completion of the sale of BP's 50% interest in TNK-BP to Russian oil company Rosneft. Market forecasts were for a buyback closer to $5-6bn.
National Grid gained after HSBC raised its target price from 780p to 850p and upgraded the stock to overweight.
Heading the other way was high-end fashion group Burberry which sunk in sympathy with sector peer Mulberry after the latter warned on profits this morning. Mulberry said that trading since Christmas has been "disappointing" reflecting a reduction in tourist spend in London.
Miners were also dragging on the FTSE 100, hit by ongoing concerns over the Eurozone and the unveiling crisis in Cyprus, as well as falling metal prices.
FTSE 250: Phoenix Group climbs on strong results
Closed life fund consolidator Phoenix Group climbed after it unveiled strong results for the financial year ended December 31st, underpinned by solid cash generation from its operating companies.
Howden Joinery was higher after Canaccord Genuity raised its target price from 174p to 305p and upgraded the stock to buy.
Meanwhile, Homeserve sank after warning that a fall in customer numbers next year will lead to the loss of 300 jobs. Nevertheless, the firm said that it will likely meet forecasts for the year to March 31st.
SOCO International dropped after Nomura downgraded it from 'buy' to 'neutral'.
FTSE 100 - Risers
BT Group (BT.A) 276.70p +3.91%
AstraZeneca (AZN) 3,236.00p +3.29%
Sainsbury (J) (SBRY) 375.50p +2.07%
Marks & Spencer Group (MKS) 397.60p +1.95%
Prudential (PRU) 1,101.00p +1.94%
BP (BP.) 457.70p +1.85%
Centrica (CNA) 357.60p +1.45%
National Grid (NG.) 753.50p +1.34%
Smith & Nephew (SN.) 749.00p +1.22%
RSA Insurance Group (RSA) 117.60p +1.12%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,330.00p -4.11%
Petrofac Ltd. (PFC) 1,446.00p -3.66%
Eurasian Natural Resources Corp. (ENRC) 285.30p -3.06%
Evraz (EVR) 225.50p -2.59%
Royal Bank of Scotland Group (RBS) 293.30p -2.40%
Johnson Matthey (JMAT) 2,223.00p -2.03%
IMI (IMI) 1,266.00p -2.01%
Weir Group (WEIR) 2,222.00p -1.90%
GKN (GKN) 266.00p -1.77%
Aberdeen Asset Management (ADN) 409.00p -1.75%
FTSE 250 - Risers
Phoenix Group Holdings (DI) (PHNX) 649.50p +7.27%
Barr (A.G.) (BAG) 572.00p +6.02%
Bumi (BUMI) 305.40p +3.67%
Devro (DVO) 363.20p +3.27%
United Drug (UDG) 267.60p +3.12%
Kentz Corporation Ltd. (KENZ) 414.70p +2.65%
Howden Joinery Group (HWDN) 235.00p +2.49%
QinetiQ Group (QQ.) 208.60p +2.41%
Centamin (DI) (CEY) 57.50p +2.40%
Home Retail Group (HOME) 158.90p +2.32%
FTSE 250 - Fallers
Homeserve (HSV) 211.40p -5.20%
Soco International (SIA) 382.10p -4.47%
SDL (SDL) 425.00p -3.76%
Petra Diamonds Ltd.(DI) (PDL) 122.80p -3.54%
Diploma (DPLM) 580.50p -3.33%
Elementis (ELM) 258.60p -3.11%
Betfair Group (BET) 696.00p -2.93%
EnQuest (ENQ) 137.30p -2.76%
Morgan Crucible Co (MGCR) 286.40p -2.58%
Euromoney Institutional Investor (ERM) 906.00p -2.58%