European shares edge higher, ARM leads

Last Updated: Tue, Feb 05, 2013 08:20 hrs

LONDON, Feb 5 (Reuters) - European shares edged higher on Tuesday, stabilising after the previous session's sharp sell-off, as investors digested a raft of earnings reports, with ARM leading gainers after its fourth-quarter results.

British chip designer ARM rose 3.9 percent to the top of the FTSEurofirst 300 gainers as it reported a better-than-expected rise in pretax profit in the fourth quarter, boosted by rising sales of smartphones and tablets using the firm's technology.

The FTSEurofirst 300 was 0.2 percent higher at 1,153.66 by 0808 GMT, having dropped 1.5 percent on Monday as mounting political uncertainty in major euro debtor countries prompted investors to lock in profits on indexes trading close to multi-year highs.

Fund managers said any stock market weakness should be considered to be a pause, rather than the start of a more serious sell-off.

"Bit of nerves creeping back in after the massive rally of stock markets over the past couple of months," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million of assets.

"This, together with some profit-taking, makes the market look weaker than it is. For now the FTSEurofirst 300 is still trading around two-year highs and the bull case remains intact."

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