FRIDAY MARKET CLOSE: Royal Mail delivers Footsie feel-good

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London outperformed other European markets as enthusiasm surrounding the Royal Mail float provided an extra boost to US-related relief.

Michael Hewson, senior analyst at CMC Markets, said: “The fact that UK small investors were able to feel confident in participating in an IPO and appear to have done well from the float has to be good for stock market confidence in the longer term, and could augur well for future offerings when the government looks to sell-off TSB and the rest of Lloyds Banking Group.”

Lloyds added 1.1p at 76p, as global markets continued to push higher amid optimism regarding the prospects of a US debt ceiling agreement. The FTSE 100 index added 56.7 points to close at 6,487.19.

Another financial stock on the rise was Standard Life, after the company had its positive rating reaffirmed by JP Morgan. Its shares climbed 9.1p to 355.5p.

Also enjoying a good day was Costa Coffee owner Whitbread. Gains of more than 3 per cent put it near the top of the blue-chip risers’ board at 3,210p after an upgrade from Citigroup.

House builders continued to be in demand, backed by broker comment regarding the government stimulus schemes being rolled out to boost the housing market. But builders’ merchant Travis Perkins was the biggest beneficiary, up 3.3 per cent at 1,678p.

Mining and commodities giant Glencore Xstrata was buoyed by reports that it is to combine its Canadian nickel operations with rival Vale. With experts saying the tie-up could yield big savings, Glencore shares climbed 9.25p to 335.9p.

But defence contractor BAE Systems was under pressure after warning that it could suffer some adverse effects from the US government shutdown. It was down 3.2 per cent at 436.3p, while FTSE 250 defence firm Chemring plunged 22 per cent to 220p after a starker warning.