FTSE forges ahead

The London market pushed ahead today as strong gains for microchip designer ARM and engine manufacturer Rolls-Royce helped offset more retail woe.

The FTSE 100 Index, which staged a late session fightback on Wednesday to set a new two-and-a-half year high, climbed another 40 points to 6084.1.

The improvement came despite a surprise profits warning from FTSE 250 firm Mothercare, which fuelled nerves surrounding the retail sector. The stock slumped 5% – down 30.5p to 567.5p – as it joined Next, HMV and Clinton Cards in highlighting the impact of December’s snow.

The risers board was topped by Cambridge-based technology firm ARM Holdings after computing giant Microsoft confirmed it would run the latest version of its flagship Windows software on the company’s microchips.

The deal is a coup for Cambridge-based ARM, analysts said, and will allow both companies to push into the high-end tablet market, which includes products such as Apple’s iPad. The stock jumped to a 10-year-high earlier in the session, rising 8% or 39p to 510.4p.

Rolls-Royce was another strong riser, up 13.2p to 667.2p, after it completed contracts for Trent 900 and Trent 1000 engines to power up to 61 new wide-body aircraft with British Airways.

The deal will appease investors shaken by safety fears about the Trent 900 after the explosion which forced Australian carrier Qantas to ground its fleet of A380 superjumbos.

BP shares moved ahead nearly 2% despite a damning report from a US presidential commission, which accused BP of taking “short cuts” which led to the Gulf of Mexico oil spill disaster.

The official inquiry also found firms Halliburton and Transocean partly to blame, which analysts said would limit the burden faced by BP. Shares rose 9.3p to 508.5p.

Despite concerning reports from the retail sector, blue-chip retailers such as Marks & Spencer and Next posted gains, lifting 12.6p at 387.6p and 17p to 2120p respectively.

Mining stocks clawed back losses triggered by soaring metal prices, with Xstrata up 46.5p at 1546p, Eurasian Natural Resources ahead 23p at 1102p and Vedanta adding 46p to 2527p.

Outside the top flight, Clinton Cards slumped 3.75p to 24.25p after its latest profits warning, while Halfords dropped 13.3p to 426.7p as investors speculated that its portfolio of out-of-town stores may have struggled in the snow.

Household products maker McBride topped the FTSE 250 Index fallers board after it said its results will be towards the lower end of expectations. Shares were 13.4p lower at 170.4p.