The FTSE 100 index has added 12.6 points or 0.2% to 5804.1 points this morning, paced by Vodafone which has advanced for the first time in nine trading sessions.
Vodafone has rebounded 1.6% to 110.75p after the shares slid more than 4% to a three-year low yesterday, amid deepening concern about the company's sales growth. The recent eight-day losing streak for Vodafone shares was its longest in four years.
Xstrata has also added 1.4% to £16.88 as the world's biggest exporter of coal burned by power plants said second-half profit rose 34% to a record on higher metals prices. The company has also agreed to buy a $1.7bn stake in a coal mine.
At the same time, however, HBOS has fallen 42p or 4% to £10.20 after it said 2005 profit climbed 11% to £3.23bn, thanks to controlled costs and increased lending to businesses. Shares fell as HBOS still missed the £3.3bn, according to analysts surveyed by Bloomberg.
In Japan, the Nikkei 225 Stock Average index slid 240.97 points or 1.5% to close at 15,964.46 points after weaker-than-forecast US reports on consumer confidence and house sales sparked concern the economy is slowing.
Sony fell 90 yen or 1.6% to 5,440 and Honda Motor dropped 60 yen or 0.9% to 6,840 as both firms are major exporters to the US and Honda made more than half of its sales in North America last year.
Nissan Motor also lost 7 yen or 0.5% to 1,333 after Nissan's chief executive Carlos Ghosn said profit for the current quarter will decline on the back of higher gasoline prices which are expected to US consumer demand for the company's vehicles.
Mitsubishi UFJ Financial Group dropped 40,000 yen, or 2.3%, to 1.71m and Millea Holdings, the country's largest non-life insurer, fell 90,000 yen, or 3.8%, to 2.30m.
Meanwhile, energy-related stocks gained along with oil prices.
Japan Petroleum Exploration gained 110 yen, or 1.5%, to 7,260 and Teikoku Oil, which will merge with Inpex to form the country's biggest oil explorer in April, rose 40 yen, or 2.5%, to 1,621.
In the US, the Dow Jones index was down 104.14 points or 0.94% at 10,993 points after data showed signs of weakness in the US economy and raised worries about the health of corporate profits.
Google's shares suffered their second-worst one-day loss ever after chief financial officer George Reyes said its key revenue source - internet-search advertising - would see slower growth. Shares dropped 7.1% to $362.62 after earlier falling as low as $338.51.
Shares of Yahoo also fell 2.1%, or 68 cents, to $32.06 on the back of Google news, while shares of Chinese web search company Baidu.com skidded 5.3%, or $2.88, to $51.42.
Boeing was down 2%, or $1.44, at $72.69 after Australia announced it will buy long-range missiles from Boeing rival Lockheed Martin for its strike aircraft. And shares of Lockheed slipped 1.6%, or $1.19, to $72.87.
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