Markets were rangebound on Wednesday but managed to eke out small gains by the close of trade as traders digested ongoing developments in Syria and a fall in unemployment in the UK.
The FTSE 100, which swung between gains and losses for most of the day, finished just 4.44 points higher at 6,588.43 - this was its highest closing price since August 13th when it ended the day at 6,611.94.
The STOXX Europe 600 index meanwhile rose to a five-year high today, gaining 0.4% to 310.88 - its highest level since June 2008.
Global stocks rose strongly on Tuesday after Syria accepted a Russian proposal to hand over all chemical weapons to international control in an attempt to avoid US military action.
In a nationally televised speech last night, US President Barack Obama asked Congress to delay a vote on military action against Bashar al-Assad's regime in light of recent diplomatic developments. He said that the Russian initiative "has the potential to remove the threat of chemical weapons without the use of force".
"The fact remains that the congressional vote on military action is merely delayed rather than ruled out," said Brenda Kelly, Senior Market Strategist from IG.
UK jobless rate edges lower
Supporting stocks this morning was a fall in the UK unemployment rate from 7.8% to 7.7% in the three months to July, according to the Office for National Statistics. The number of people claiming jobless benefits fell by 32,600 in August compared to a revised fall of 36,300 in July, the biggest decline since June 1997. Economists had forecast a drop of 21,000.
Bank of England (BoE) Governor Mark Carney has vowed that interest rates would remain at a record low of 0.5% as long as the unemployment rate holds above 7%.
Analyst Sasha Nugent from Caxton FX said that the decent report will "most definitely cause the market to question the BoE's policy ahead of tomorrow's Inflation Report. All figures are pointing to the fact that maybe the market is right, the BoE may have to raise rates sooner than they think."
Speaking this afternoon, Monetary Policy Committee member David Miles struck a dovish tone as he attempted to downplay tightening fears in the aftermath of the data. He said that the recovery may be in progress but assured that it is only just starting.
FTSE 100: ARM, Glencore lead the risers
Leading the risers today was chip designer ARM Holdings after key customer Apple unveiled two new iPhone models. The phones use a new 64-bit processor, which analysts believe will equate to an increased royalty rate to ARM than the 32-bit previously used.
Glencore Xstrata was continuing to perform well after yesterday raising its target for expected synergies post-merger and cutting capex guidance. Deutsche Bank, JPMorgan and Jefferies all raised their target price for the stock today with the latter saying that it remains "one of our top picks".
Heading the other way were Admiral, G4S, Hargreaves Lansdown, Land Securities and Standard Life after going ex-dividend, meaning that from today investors will not be able to benefit from each companies' latest dividend payments.
Costa and Premier Inn owner Whitbread was extending losses after falling sharply on Tuesday as it announced a slowdown in second-quarter growth. Weighing on the stock this morning was a downgrade by JPMorgan Cazenove to 'neutral' as the bank said the shares
are now "fully valued" after their recent 25% outperformance of the UK market over the past year.
The same bank also cut its rating for BSkyB to 'neutral', causing the pay-TV and broadband group to fall this morning.
Home improvement retailer Kingfisher, owner of B&Q and Screwfix, declined after reporting a 1.6% fall in first-half profits as it blamed depressed consumer confidence and cold weather.
FTSE 100 - Risers
ARM Holdings (ARM) 986.50p +4.84%
Glencore Xstrata (GLEN) 339.00p +3.12%
Experian (EXPN) 1,189.00p +2.24%
Tullow Oil (TLW) 1,073.00p +1.51%
Aggreko (AGK) 1,651.00p +1.29%
GlaxoSmithKline (GSK) 1,619.00p +1.28%
Vodafone Group (VOD) 210.15p +1.08%
Morrison (Wm) Supermarkets (MRW) 297.20p +0.92%
AstraZeneca (AZN) 3,161.50p +0.89%
Shire Plc (SHP) 2,486.00p +0.81%
FTSE 100 - Fallers
Admiral Group (ADM) 1,227.00p -4.14%
Kingfisher (KGF) 408.50p -2.74%
Lloyds Banking Group (LLOY) 75.99p -2.58%
easyJet (EZJ) 1,325.00p -2.43%
International Consolidated Airlines Group SA (CDI) (IAG) 312.10p -2.41%
London Stock Exchange Group (LSE) 1,618.00p -2.06%
Persimmon (PSN) 1,154.00p -2.04%
Associated British Foods (ABF) 1,805.00p -2.01%
G4S (GFS) 254.30p -1.93%
Hargreaves Lansdown (HL.) 1,020.00p -1.92%
FTSE 250 - Risers
888 Holdings (888) 161.60p +8.09%
Perform Group (PER) 547.50p +3.79%
Premier Farnell (PFL) 235.10p +2.93%
F&C Asset Management (FCAM) 98.70p +2.60%
Phoenix Group Holdings (DI) (PHNX) 759.50p +2.57%
Grainger (GRI) 178.90p +2.29%
African Barrick Gold (ABG) 170.00p +2.16%
Carillion (CLLN) 318.00p +2.15%
UBM (UBM) 743.00p +2.13%
Devro (DVO) 336.20p +2.03%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 110.20p -4.67%
Barratt Developments (BDEV) 317.10p -4.57%
Ashtead Group (AHT) 648.50p -3.21%
Synthomer (SYNT) 242.00p -2.89%
Moneysupermarket.com Group (MONY) 163.70p -2.85%
Berkeley Group Holdings (The) (BKG) 2,140.00p -2.64%
Kenmare Resources (KMR) 28.21p -2.59%
Polymetal International (POLY) 736.50p -2.58%
Oxford Instruments (OXIG) 1,369.00p -2.49%
Temple Bar Inv Trust (TMPL) 1,191.00p -2.46%