TUESDAY MARKET CLOSE: Arm heads higher as FTSE jumps 1%

A forecast-beating second quarter helped Arm Holdings jump more than 5 per cent as the wider market rebounded from recent woes.

Deutsche Bank cut its price target on Tesco shares. Picture: Getty

Shares in the chip designer were up 47.5p at 881p as surging licensing fees helped profits to grow 9 per cent.

Mike van Dulken, head of research at Accendo Markets, said: “Results were helped by a strong handheld device market and higher chip shipments giving a 42 per cent boost to licensing revenues, which bodes well for future royalties whose growth is already seen improving in the second half.

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“Having given up over 20 per cent year to date, the highly successful chip designer’s shares may also have begun to flash up on bargain hunting radar.”

Investors looking for value were spoilt for choice after the recent sell-off. Housebuilding stocks – among the least loved a day earlier when Rightmove said prices were falling – were on the risers’ board this time round. Persimmon was up 56p at 1,302p and Barratt Developments added 14.3p to 368.5p.

With fears receding that the air disaster over Ukraine would lead to a widening of the conflict, the FTSE 100 Index also enjoyed a bounce, climbing 66.9 points or almost 1 per cent to 6,795.34.

But Tesco suffered the opposite effect as Deutsche Bank cut its price target on Tesco shares and warned there was likely to be a drag on trading in the short term as new boss Dave Lewis opts to step up investment in the customer offer as well as store refurbishments.

The departure of Philip Clarke meant investors overlooked Monday’s profits warning, but shares fell 4 per cent or 11.3p at 277.4p after the broker’s comments. Already battered by the fierce competition in the sector, Tesco’s rivals were also on the fallers’ board, with Morrisons off 2.2p to 171.5p and Sainsbury’s down 4.5p at 313.8p.