European equities start the month on a high

Nick Serff, Market Analyst, City Index commented: "European indices shrugged off their Dubai World hangover on Tuesday to post gains of over 1.8 percent in early trade. UK and European markets took their lead from a strong month end rally on Wall Street yesterday, and gains in Asia overnight. The move higher in the U.S started after Dubai World announced plans to restructure $26 billion of its debt.

Japan's Nikkei 225 helped Asian stock indexes to rally after the Bank of Japan said they will increase their quantitative easing measures. This helped the Nikkei snap back from a two week losing streak to finish up 2.4 percent on the day.

Mining stocks are also in the spotlight this morning after February gold futures traded above $1200 an ounce for the first time ever. No signs of selling have appeared from longer term holders of spot gold, with investors adding to their core positions on any sign of weakness.

UK Manufacturing PMI took the shine off Sterling's strong start to the day, after figures released at 9:30 London time. The numbers showed the index falling to 51.8 from 53.4 the previous month. Sterling dropped against a basket of currencies immediately after the figures. The market had been looking for a reading of 54.

Investors have been closing out of their long positions on this morning's strength, selling the FTSE around the 5275 resistance level. Trading could now be muted in the run up to this afternoon's release of U.S ISM Manufacturing data, due at 15:00 London time."