London-listed stocks outperformed their European counterparts on Tuesday (5 January), as equity markets in both regions recovered from a dismal start to 2016.

Trading volumes remained thin but the FTSE 100 ended a choppy session on an upbeat note, after registering its worst first trading day of the year since 2000 on 4 January, with mining stocks back in positive territory after the turmoil of the previous session.

The UK's main benchmark climbed 0.72%, faring better than the main European indices, although they too rebounded from a miserable start to the year. Germany's Dax and France's CAC 40 gained 0.26% and 0.34% respectively, while the Pan-European Stoxx 600 index advanced 0.62%.

Miners, which were dragged lower by disappointing reading on the UK manufacturing industry on the first trading day of the year, were buoyed by news Chinese authorities injected $20bn (£13.6bn, €18.6bn) into the economy to stabilise its equity and currency markets, and by upbeat construction data in Britain.

The Markit/CIPS construction purchasing managers' index rose to 57.8 in December from 55.3 in November, exceeding expectations for a 56 reading and fuelling hopes over the health of the construction sector.

"This is a largely decent, reassuring survey that boosts hopes that construction output contributed to GDP growth in the fourth quarter of 2015 after being a drag in the third quarter," said Howard Archer, chief European and UK economist at IHS Global Insight.

On the corporate front, with big players in the mining industry, such as Anglo American, Glencore and Fresnillo all firmly in the black, there was less positive news for retailers.

The post-Christmas blues for Next shareholders was worsened by news the retailer's Christmas sales fell short of expectations, due to a combination of unusually warm weather between November and December and increased online competition. As a result, shares in the FTSE 100 group fell as much as 5%.

"Holders will be happy to receive another 60p special dividend [...] thanks to good cashflow, but sceptics might not like a worse net debt position and what amounts to a challenging environment in which to be a retailer," said Mike van Dulken, head of research at Accendo Markets.

Meanwhile, Sainsbury was also on the back foot after its bid for Home Retail, the owner of Argos and Homebase, was rejected. The supermarket group said it would consider its options, adding there were no guarantees it would make a fresh bid for Home Retail, whose shares surged upon disclosure of the offer.