Continuing upbeat data from the US housing sector boosted the FTSE 100 in afternoon trade on Wednesday, as stocks tracked Wall Street indices higher.
Stocks sank yesterday (FTSE 100 down 1.3%, Cac 40 down 2.7% and FTSE MIB down 4.9%) in the wake of the Italian elections which revealed growing support for anti-austerity parties. Pier Luigi Bersani's centre-left party won the lower house by a narrow margin but failed to gain enough votes to secure the senate.
Nevertheless, stocks managed to claw back most of yesterday's losses after the National Association of Realtors' pending home sales index Stateside smashed expectations, rising 4.5% to 105.9 points, the highest since April 2010. Economists were expecting the index to increase by a more moderate 1.5%.
The data comes after the US Commerce Department revealed on Tuesday that new home sales jumped 16% in January to the highest level since July 2008.
Speaking to the Senate's Banking Committee today, Federal Reserve Chairman Ben Bernanke made note of the housing recovery, saying: "We are still far from where we like to be but the evidence shows that the housing market is strengthening and low interest rates is one of the reasons for that strengthening."
Last night, Bernanke defended the central bank's asset purchase programme, saying that it was necessary until the job market improves substantially.
Economic data from closer to home also brightened the mood today: Eurozone economic sentiment rose for the fourth consecutive month in February, according to the European Commission; meanwhile, fourth-quarter gross domestic product in the UK contracted at a 0.3% pace, as expected, though the annualised rate was revised higher.
FTSE 100: Weir impresses with results
Engineering solutions group Weir was a high riser after managing to register record profits and margins last year, saying that it expects another year of profitable growth in 2013.
Heading the other way was oilfield services group Petrofac after underwhelming with a 9.0% rise in revenue and 17% increase in net profit in 2012.
Eurasian Natural Resources Corporation was down after it announced that, taking into account the effect of one-off step-up gains and impairments, the effective-tax-rate (ETR) for the group, for 2012, is expected to be around 45%, above the previously guided level of 37% to 39%.
Intu Properties, formerly known as Capital Shopping Centres Group, posted a stable set of full year results on Wednesday while at the same time unveiling a placing to fund the acquisition of Midsummer Place in Milton Keynes, prompting shares
After an earlier rise following its full-year figures, broadcaster ITV had slipped into the red by the close. The firm announced this morning that it would be rewarding shareholders with a special dividend worth £156m after posting 2012 results which showed a rise in profits and revenues.
Banking stocks were in demand this morning despite the FSA's plans to ease capital requirements for new banks in an attempt to aid competition and increase choice for consumers on the High Street.
Barclays was making gains on reports that it could cut pay by around $890m over recent scandals that forced out high-profile board members, such as Chief Executive Bob Diamond. Investors were also choosing to build positions in RBS ahead of its full-year results on Thursday.
Global banking giant HSBC was higher after Investec upgraded its rating from 'hold' to 'add', saying that the lender could hit its 12% return on equity target this year.
FTSE 250: bwin.party soars after broker upgrade
Online gaining group bwin.party jumped after the US state of New Jersey approved internet betting. Citigroup upgraded its rating for the stock from 'sell' to 'neutral' today, while Morgan Stanley suggested that the share price could quadruple as more states clear the way for online gambling.
Bodycote, the world's largest thermal processing services provider, surged after operating profits rose 14.4% in 2012, boosted by growth in its global Aerospace and Energy business.
Restaurant and pub operator Restaurant Group also rose after reporting a sharp increase in full-year earnings, lifting its dividend payment and saying its new financial year had started well.
Heading the other way was asset management house Henderson Group, which said its underlying profit before tax decreased by 8.0% to £146.5m in the full year to December 31st.
FTSE 100 - Risers
Weir Group (WEIR) 2,322.00p +7.30%
Melrose Industries (MRO) 260.00p +3.96%
Prudential (PRU) 973.00p +3.24%
Fresnillo (FRES) 1,550.00p +2.31%
Wolseley (WOS) 3,070.00p +2.20%
Royal Bank of Scotland Group (RBS) 346.80p +2.15%
Marks & Spencer Group (MKS) 369.50p +2.07%
Carnival (CCL) 2,447.00p +2.00%
Vodafone Group (VOD) 165.10p +1.98%
TUI Travel (TT.) 317.00p +1.93%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,497.00p -6.26%
Intu Properties (INTU) 333.90p -2.62%
Eurasian Natural Resources Corp. (ENRC) 347.00p -2.58%
Croda International (CRDA) 2,555.00p -1.12%
ITV (ITV) 119.00p -1.00%
Diageo (DGE) 1,945.00p -0.82%
Pearson (PSON) 1,145.00p -0.69%
Morrison (Wm) Supermarkets (MRW) 259.00p -0.61%
Serco Group (SRP) 571.00p -0.61%
Whitbread (WTB) 2,454.00p -0.61%
FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 150.00p +8.85%
Bodycote (BOY) 543.00p +7.42%
Restaurant Group (RTN) 413.60p +6.32%
Savills (SVS) 527.50p +5.82%
3i Group (III) 317.90p +4.50%
Ted Baker (TED) 1,243.00p +4.45%
Ocado Group (OCDO) 127.60p +4.42%
Morgan Crucible Co (MGCR) 288.00p +3.78%
AZ Electronic Materials SA (DI) (AZEM) 385.00p +3.33%
Diploma (DPLM) 620.00p +3.33%
FTSE 250 - Fallers
Beazley (BEZ) 201.50p -6.19%
Bumi (BUMI) 331.30p -5.34%
Henderson Group (HGG) 153.90p -3.69%
Brewin Dolphin Holdings (BRW) 195.90p -3.02%
RPS Group (RPS) 238.40p -2.21%
WH Smith (SMWH) 667.00p -2.13%
Redrow (RDW) 185.00p -2.06%
Supergroup (SGP) 630.00p -2.02%
easyJet (EZJ) 977.50p -2.00%
Barr (A.G.) (BAG) 510.00p -1.92%