Shares in Royal Mail surged after rival Whistl – formerly TNT post – said it would be suspending its door-to-door delivery service in a number of UK cities.
The former state-owned group jumped almost 5 per cent at one point after Whistl said private equity backer LDC had pulled out of funding to help expand the “final mile” service, putting 2,000 jobs at risk. Share gains eased later in the day but the firm still closed up 18.7p, or 3.9 per cent, at 497.6p.
The rise failed to stop the FTSE 100 index giving up an early rise to close down 16.97 points at 7,029.85.
Tony Cross, market analyst at Trustnet Direct, said: “Any early signs of euphoria on the FTSE-100 gave way during the session to leave the London blue-chip index little changed on the first full day of trading under the new government.”
The dip came despite a boost for global markets after another cut in Chinese interest rates.
The impact of the election result continued to be felt as housebuilders posted further gains after Labour’s election defeat ended the prospect of a mansion tax. Taylor Wimpey was 4.7p higher at 180.4p and Persimmon lifted 22p to 1,768p.
Scottish Gas owner Centrica also posted further gains – up 2.4p to 280.6p – after surging by 8 per cent on Friday amid relief that the industry had ducked Ed Miliband’s threat of a price freeze and tighter regulation.
Elsewhere in the top flight, accountancy software firm Sage rose 2 per cent or 12.5p to 556p following its upbeat half-year results last week.
Supermarket giant Tesco also improved 3.7p to 232.5p amid speculation that a bidding war could lift the sale price of its Dunnhumby customer data business above £2 billion.
Global information giant Nielsen is said to be the latest firm to express an interest in the operation, which operates Tesco’s Clubcard loyalty scheme.