February 5, 2013 / 5:35 PM / 5 years ago

Upbeat earnings drive Britain's FTSE higher as euro zone worries recede

* FTSE 100 rises 0.6 percent
    * Euro data suggests region may have turned a corner
    * BP and BG lead energy stocks higher
    * ARM boosted by results and retail data

    By Alistair Smout
    LONDON, Feb 5 (Reuters) - Britain's top share index
rebounded on Tuesday from a steep fall in the previous session,
with investors encouraged by forecast-beating earnings and
improving economic data from the euro zone.
    The FTSE 100 closed 0.6 percent, or 35.92 points,
higher at 6,282.76, after suffering its biggest one-day in three
months on Monday as political uncertainties in Spain and Italy
and a string of analyst downgrades sparked profit taking from
4-1/2-year highs.
    "Despite the general plotline being of renewed European
concerns, I do not think the broader economic backdrop has
changed materially and yesterday's moves were more
position-based than fundamental change," Jack Pollard, analyst
at Sucden Financial Private Clients, said.
    "In the context of this, we've seen these lows bought and
we've traded higher today, along with a tightening in European
credit spreads which is helping to underpin the macro."
    Yields in Spain and Italy eased after Markit's euro zone
composite PMI, which gauges business activity across thousands
of companies and is seen as a good gauge of future growth in the
currency bloc, hit a 10-month high in January. 
    The oil price also recovered towards $117 a barrel, helping
the energy sector, which contributed over 11 points to the rally
on the FTSE 100.
    Oil heavyweight BP added 5 points alone to the index
after its fourth-quarter profits beat forecasts, although
profits fell. 
    Oil and gas group BG also boosted the sector as its
shares recovered from a 3.1 percent fall in morning trade after
it said it would miss 2015 production targets. 
    Following a more upbeat conference call, the shares surged
as much as 6.5 percent on the day, before closing up 2.9
percent. They added the most points to the FTSE 100 index after
    "We've been buying them on the rebound after the conference
call. They're going to be drilling Egyptian wells to offset the
output decline," says Darren Easton, director of trading at
London-based Logic Investments. 
    Chip designer ARM was also a big riser following
earnings, gaining 4.4 percent after fourth-quarter profits beat
    British retail sales also rose strongly in January, boosted
by the popularity of tablet computers and smartphones which ARM
provides parts for, a survey showed. 
    "Fundamentals are driving individual movers with ARM's
results helping to underpin the market, though today's retail
sales probably had a bit of spillover given the expectation
these were boosted by purchases of technological items," Pollard

 (Additional reporting by Sudip Kar-Gupta; Editing by Susan
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