LONDON (Reuters) - The FTSE 100 steadied on Wednesday, pausing after three days of falls thanks to a mixed batch of corporate results that pitted a weak showing in Europe for GlaxoSmithKline and BT against a sterling performance for chipmaker Arm.
The international backdrop also offered conflicting signals, with weak U.S. data on the one hand and growing hopes of fresh steps to combat the euro zone crisis on the other.
At the close, the FTSE 100 index .FTSE was broadly flat at 5,498.32 points, taking a breather after a three-session losing streak. Volume was once again weak, at two-thirds of its 90-day daily average.
"With seven FTSE 100 companies reporting today, and 13 due to update the market on Thursday, we'll have had a fifth of the UK blue chips reporting in just two sessions. It'll take analysts and strategists a while to chew through all the details, but so far the earnings season is looking more mixed than positive in the UK," said Mike Mason, a trader with Sucden Financial Private Clients.
GlaxoSmithKline (GSK) (GSK.L), down 1.3 percent, was the biggest drag on the index, as the group warned that sales in 2012 will be flat and posted below-forecast second-quarter results due to weakness in the European markets.
"Overall, a slightly disappointing quarter for GSK with a slight miss both on revenues and EPS, but this is not very unexpected - GSK had clearly been signalling a weaker Q2 was likely. The longer-term growth with GSK continues to look comparatively good," Bernstein Research said in a note.
The pharmaceuticals heavyweight shaved around 4 points off the FTSE 100 index.
A lacklustre showing in crisis-hit Europe also hurt performance at British telecom group BT (BT.L), down 3.3 percent as its quarterly results came in below analysts' forecasts. Espirito Santo Investment Bank analysts described the results as "a little soft".
Results were not always the top focus, though. Tullow Oil (TLW.L) shed 6.3 percent in heavy volumes, as investors focused on risks and costs associated with its proposed Uganda development, shrugging off an in-line rise in first half profits.
On the upside, ARM Holdings ARM.L, up 8.6 percent, was the top gainer trading in high volume of almost twice its 90-day daily average, with the chip designer's results beating market expectations as demand for its low power chips in smartphones and tablets outstripped the industry.
Banks .FTNMX8350, up 1.2 percent, were the biggest positive weight on the index, after European Central Bank policymaker Ewald Nowotny raised the prospect of steps that could boost the firepower of the euro zone's new bailout fund earlier on Wednesday spurring a Europe-wide share rebound, particularly in the heavily sold indexes of Spain and Italy.
HSBC (HSBA.L), which reports earnings next Monday, was up 1.4 percent leading the sector and providing it with the biggest individual support.
Energy stocks were also among the best performers, led by oil major Shell (RDSa.L), up 0.8 percent, which sealed an exploration tie-up with China's state-run oil firm CNOOC (0883.HK) on Wednesday in a move which will help secure longer term growth from projects in the world's energy-hungry second largest economy.
Reporting by Viktoria Dendrinou; Additional Reporting by Jon Hopkins