WORLD markets stormed ahead yesterday after forecast-beating results from both sides of the Atlantic and as grim economic data raised speculation over a European interest rate cut.

The FTSE 100 Index rallied 2% or 125.5 points to 6406.1, led higher by blue chips ARM Holdings and Associated British Foods following better-than-expected trading updates.

US giants Netflix and DuPont posted strong results and investors piled in on speculation that the European Central Bank might act to boost the eurozone following figures showing that Germany's private sector shrank in April. With all eyes firmly on tomorrow's gross domestic product data and whether or not the UK managed to dodge a triple-dip recession, the pound largely held firm at 1.53 US dollars and 1.17 euros.

ARM was the biggest FTSE 100 riser after it delivered a higher-than-expected 44% hike in underlying pre-tax profits to £89.4 million in the first quarter. Sales surged by more than one-quarter and royalty revenues on its chips leapt to a new record, helping shares jump 12% or 103p to 972p.

Associated British Foods followed with a 149p improvement to 1999p after it reported another strong trading period for retail division Primark.

Like-for-like sales increased 7% in the 24 weeks to the start of March, a performance described as "exceptionally strong" by owner AB Foods. The retailer's growth drove a 25% surge in adjusted pre-tax profits to £452m at AB Foods, which also owns British Sugar as well as household brands Kingsmill, Ryvita and Twinings.

Elsewhere in the retail sector, shares in Carpetright were 7p higher at 637p after it said underlying UK sales were up by 5.6% in the 12 weeks to Saturday, helped by the impact of cold spring weather on demand for home improvement projects.

Chief executive Darren Shapland said self-help initiatives such as store refits were helping the improved performance.

And there was relief for investors in Premier Foods after the Mr Kipling and Oxo owner issued a steady trading update, with branded sales 2.2% higher to £275m during the first three months of the year thanks to a marketing push. Shares rose 2.25p to 73.75p.

The biggest FTSE 100 risers were ARM Holdings, up 103p to 972p, Associated British Foods, up 149p to 1999p, Prudential, 64p higher at 1096p and CRH, up 72p to 1387p. The biggest FTSE 100 fallers were Fresnillo, down 24p to 1092p, Antofagasta, off 8.5p to 884p, Tullow Oil, 9p lower at 1037p and Randgold Resources, down 39p to 4831p.