THURSDAY MARKET CLOSE: RBS lifted by Osborne’s sell-off plans

Royal Bank of Scotland headed higher after the Chancellor confirmed he was planning to return the Edinburgh-based lender to private hands.

The London Stock Exchange building. Picture: Getty

In his Mansion House speech last night, George Osborne said it was in the interests of taxpayers to begin the sell-off of the government’s 80 per cent stake, and shares closed up 6.7p, or almost 2 per cent, at 361.5p.

Chris Beauchamp, senior market analyst at IG, said: “RBS shares remained solid this afternoon despite the news that the Chancellor was moving towards a sale of the government stake.

“Arguably the news should be a positive anyway, not least since the bank can finally begin to look forward to future when its management team does not have Whitehall peering over their shoulders at every decision.”

Rival Lloyds Banking Group, which is now 17.9 per cent owned by the state following the sale of another tranche of shares by the government, finished the session 0.39p higher at 87.12p.

Those gains helped the FTSE 100 Index end the trading day up 16.47 points at 6,846.74.

Elsewhere, Home Retail Group rose 4.9p or 3.1 per cent to 164.4p after its latest update confirmed contrasting results at its store chains. Argos saw like-for-like sales fall in the first quarter as a rise in sales of mobile phones failed to offset a decline in demand for televisions and tablets, but takings at DIY retailer Homebase lifted 5.4 per cent.

Handbag maker Mulberry edged up 2p to 907p after revealing that efforts to reconnect with its affordable luxury roots helped UK retail like-for-like sales surge 17 per cent in the first ten weeks of its new year.

Supermarkets were also on the rise after yesterday’s figures from Sainsbury’s showed a better-than-feared drop in sales. The UK’s third-largest grocer rose 3.7p to 264p, while market leader Tesco finished 4.2p higher at 215.65p.