* FTSEurofirst 300 up 0.6 percent
* BP, ARM rise on Q4 profits beats
* KPN slides after rights issue announcement
By Tricia Wright
LONDON, Feb 5 (Reuters) - European stock markets staged a
tentative recovery on Tuesday after a sharp sell-off a day
earlier as investors waded through a stack of earnings reports,
with ARM and BP both enjoying strong gains.
British chip designer ARM was among the top FTSEurofirst 300
risers, up 3.8 percent after it unveiled 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.
Index heavyweight BP advanced 1.5 percent after its
fourth-quarter profits exceeded analysts' expectations, helped
by a record performance from its refining division.
Sector peer BG Group, however, was a major drag, off
2 percent, as it warned it would miss a medium-term production
The FTSEurofirst 300 was up 0.6 percent at 1,157.62
by 1203 GMT, recouping some of a 1.5 percent drop seen on Monday
when political uncertainty in the euro zone's big debtor states
prompted investors to lock in profits on indexes trading close
to multi-year highs.
A corruption scandal in Spain and polls showing Italy's
former prime minister Silvio Berlusconi regaining ground before
elections this month triggered fresh concern over potential
threats to euro zone stability and growth.
"We would normally expect clients to really start buying
following such a big fall but that hasn't been the case at all
today," said Angus Campbell, head of market analysis at Capital
"Our clients feel that with the Italian election looming in
a few weeks' time ... they're just remaining really quite
The euro zone's blue-chip Euro STOXX 50 climbed
1.1 percent to 2,652.84, having erased all its gains for the
year with a 3.1 percent fall on Monday.
GFT markets technical analyst Fawad Razaqzada remained
constructive on the index.
"The technical picture still looks bullish to me as long it
holds above 2,600/10 (resistance in September)," he said.
Razaqzada sees near-term resistance around the 2,670 area,
followed by 2,700 - both intra-day support levels.
Elsewhere among the fallers, KPN slid 22.2 percent
after the Dutch telecoms group announced plans to cut its debt
with a 4 billion euro ($5.4 billion) cash call to shareholders,
as it posted a fourth-quarter net loss.
Trading volume in KPN was robust, at 450 percent of its
90-day daily average, against the FTSEurofirst 300 on 56 percent
of its average.
Tele2 was another significant decliner, down 10.5
percent, after warning of slower growth in Sweden and Russia
this year after the Nordic and emerging markets telecoms group
reported lower than expected fourth-quarter earnings.
Trading volume in Tele2 stood at 468 percent of its 90-day
The fourth-quarter earnings season in Europe has got off to
a mixed start. Of the 19 percent of companies to have reported,
65 percent have beaten or met expectations, but with a quarterly
year-on-year contraction of 12.3 percent, according to Thomson
Reuters Starmine data.