The London market closed higher after recent heavy losses but traders were underwhelmed by better-than-expected festive trading at supermarket Sainsbury's.

The FTSE 100 Index lifted 31.7 points to 5961, buoyed by official data overnight from China showing that exports rose 2.3% last month in the world's second largest economy.

Across Europe, equities regained a degree of poise after last week's dramatic falls following a run of poor economic data and interruptions to trading on Chinese markets.

France's Cac 40 rose 0.3%, while the Dax in Germany was 0.3% lower.

In a session that saw little economic data released the pound was slightly up against the US dollar at just under 1.45, and slightly higher against the euro at 1.33.

In London, oil stocks helped push the market higher as the cost of crude recovered after dipping below 30 US dollars a barrel at one stage on Tuesday.

BP added 12.8p to 335.9p, while Royal Dutch Shell slipped 3.5p to 1345.5p.

But Sainsbury's saw a lukewarm response to its Christmas trading statement as it also remained tight-lipped on plans for an improved offer for Argos owner Home Retail Group.

The supermarket chain said sales in established stores excluding fuel edged 0.4% lower in the 15 weeks to January 9 against a "highly competitive" market.

This was slightly better-than-expected and saw Sainsbury's upgrade its full-year sales outlook.

The supermarket also ramped up efforts to win backing for a potential takeover of £1 billion-rated Home Retail after the firm took the market by surprise last week when it revealed it had made an approach for the group in November, which was rejected.

Sainsbury's said it was still "considering its position" but stressed it would not make a deal "at any price".

It added a takeover was "strategically compelling" and would allow it to take on the might of rivals such as Amazon, with more than 100,000 general merchandise products between Argos and Sainsbury's.

Sainsbury's shares fell 3.5p to 247.7p, while Home Retail, which updates on trading on Thursday, rose 5% or 7.5p to 149.4p.

Rival supermarket Tesco, which also reports its Christmas trading on Thursday, rose 3.1p to 158.3p.

Sports Direct International was another blue chip retailer seeing strong gains - ahead by 15.8p to 427.8p - as it increased its stake in the US owner of Umbro and revealed a holding in the American retailer Dick's Sporting Goods.

It now owns a 11.5% holding in Iconix Brand Group and has bought an indirect 2.3% stake in Pittsburgh-based Dick's.

In the FTSE 250, fashion chain Ted Baker slipped 6p to 2694p, despite it saying sales for the eight weeks to January 9 rose by 10.1%, adding it was not forced into "significant" discounting before Christmas.

The biggest risers on the FTSE 100 Index were BP up 12.8p at 335.9p, Sports Direct International up 15.8p at 427.8p, Babcock International up 36.5p at 991p and Shire up 155p at 4269p.

The biggest fallers on the FTSE 100 Index were Merlin Entertainment down 11.9p at 429.8p, Lloyds Banking Group down 1.5p at 67.8p, Provident Financial down 69p at 3160p and Sky down 20p at 1083p.