Leading shares raced to a near seven week high, with Arm among the main risers.

The chip designer added 31p to £10.59 ahead of its full year results early next month after an upgrade from Citigroup. The bank said:

We upgrade Arm from neutral to buy with a target price of 1200p. The upgrade is based on three premises – 1) a favorable outlook for valuation based upon improving earnings momentum, slowing pace of derating and qualitative bias, 2) increased conviction in the firm’s ability to compete and maintain its dominant share in mobile, and 3) free cash flow and balance sheet optionality.

Overall, with a number of positive trading updates, the FTSE 100 finished 107.94 points or 1.63% higher at 6728.04. But European shares, although they ended higher, underperformed the UK index following reports that the European Central Bank will unveil quantitative easing of €50bn a month for at least a year on Thursday, less than some had been hoping for. Investors were also increasingly concerned about the outcome of this weekend’s Greek election as anti-austerity party Syriza moves further ahead in the polls.

Back in the UK, publishing group Pearson - joint owner of Penguin Random House - put on 60p to £12.96 after a better than expected performance. It gave a higher than predicted forecast for 2014 earnings and said it expected to return to growth in 2015 after a couple of problematic years, helped by a good performance from its North American business.

SABMiller added 99p to £34.42 after the brewer unveiled a 4% rise in third quarter revenue despite weakness in China.

With oil edging higher - Brent crude is up 1.4% at $48.67 a barrel - energy companies are also helping to support the market. BG is 36.6p better at 885.9p and Royal Dutch Shell B shares have risen 51p to £22.27.

But Sports Direct International dropped 44p to 716.5p following confirmation that founder Mike Ashley had sold £110m worth of shares at 720p each. There was much talk some of the cash was destined for Rangers football club.

But Barclays looked at the implications for Debenhams, up 0.45p at 72.55p, where Ashley has sold put options. Barclays said:

It may be coincidental but simple arithmetic suggests that the sale of these Sports Direct shares potentially equates to around 13.2% of the current market cap of Debenhams (as of Tuesday’s closing share price). As a reminder Sports Direct has a 12.7% exposure to Debenhams shares that exists through Debenham put options that Sports Direct has sold. A large proportion of these options expires between January and March this year, although the strike price is unknown. The sale of the put options by Sports Direct happened twice in the recent past when Debenham shares were trading at around 80p and around 63p respectively.

If the size of the Sports Direct share sale and the Debenhams exposure are coincidentally similar sizes then there is no fundamental news, but if the counterpart owning the put option wanted to exercise the option, then Sports Direct, potentially through Mike Ashley, would now have the money to buy the associated Debenham shares. Mike Ashley has a track record of owning stakes in other retailers. He owns stakes at Tesco, House of Fraser and MySale.

Elsewhere Intertek fell 88p to £22.97 after a downbeat trading update from product testing equipment peer SGS.

BT added 6.9p to 421.3p after a German magazine reported the telecoms group’s due diligence talks about the purchase of EE were going well, with no surprises so far. EE is jointly owned by Deutsche Telekom and Orange. Manager Magazine also said BT and Deutsche Telekom are discussing possible partnerships relating to their enterprise and procurement businesses.

Intu Properties rose 8p to 357.5p as Deutsche Bank moved from hold to buy and raised its target price from 280p to 380p as part of a note on the sector. It said:

We have upgraded our share price targets and stock ratings to reflect our expectation that the ECB will launch QE in the eurozone on Thursday and to reflect our rolling out of share price targets by one year.

We expect eurozone QE to benefit the quoted property sector through boosting economic growth through a depreciation in the euro and to stimulate property investment across Europe through increasing the amount of liquidity in the financial system and tempting non-eurozone buyers to acquire properties that have become cheaper in their own currencies.

Among the mid-caps Afren fell 4.79p to 21p as the oil explorer awaits news of a possible bid from Nigeria’s Seplat. Overnight Afren confirmed reports it was in talks with its bankers about amending its existing facilities, as well as seeking a deferral of a $50m amortisation payment due at the end of January. It added it was reviewing its cost base and capital expenditure plans for 2015 in the light of the recent plunging oil price, as well as its capital structure and funding requirements.

FirstGroup accelerated 7.1p to 109.1p after the transport group said it expected to meet forecasts for the year following a strong third quarter performance for its rail business and its US shuttle bus business. But Jefferies said:

Despite the headline message of overall group trading being in line with management expectations, today’s update disappoints us on mix. Greyhound 2015 margins are now guided down year on year (despite the soft 2014 comparison) and, to hold group expectations, rail seems to be plugging the gap. But even after extension, current rail contracts will expire by March 2019, so the longer-term future of rail depends on new franchise wins. 2014 was a disappointing year for that.

WH Smith rose 8p to £13.54 after the retailer reported a 2% fall in like for like sales in the 20 weeks to 17 January. High street sales were down 5% but its travel business - outlets in airports and stations - saw like for likes up 2%. Investec’s Kate Calvert remained positive:

Trading was slightly ahead of expectations, and with High Street profitability pretty much now known for the year, the focus switches to Travel. Good momentum across all Travel channels bodes well for the year as the cyclical upswing in passenger numbers appears to be continuing. We see WH Smith as a play on international travel with a solid High Street cash machine. Neither this cash generation, nor the ability to deliver sustainable double digit earnings per share growth for the foreseeable future is reflected in valuation. Buy.