By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index headed for its
first weekly gain in three weeks on Friday, with risk-sensitive
sectors such as banks and mining firms leading the charge north on
signs U.S. lawmakers are making progress in solving the budget and
debt-ceiling stalemate.
Outside the main index, shares of Royal Mail PLC soared over 30%
on its first day of trading.
The FTSE 100 index climbed 0.7% to 6,476.30, on track for its
highest closing level since late September.
On Thursday the benchmark jumped 1.5%, as House Republican
leaders in the U.S. proposed a six-week extension to the nation's
borrowing limit, in efforts to avoid a default on Oct. 17 -- the
date Treasury Secretary Jack Lew said is the deadline for raising
the debt ceiling.
House Republican leaders and President Barack Obama ended a
late-night meeting Thursday with no deal, but did agree to keep
talking. "The president looks forward to making continued progress
with members on both sides of the aisle," the White House said in a
statement.
The U.S. government has been shut down for 11 days after
lawmakers failed to agree on a budget for the new fiscal year,
which started on Oct. 1.
Stocks markets rallied globally, and in London banks posted some
of the biggest gains. Shares of Barclays PLC (BCS) gained 1.6%,
HSBC Holdings PLC (HBC) climbed 1.7%, and Lloyds Banking Group PLC
(LYG) added 1.4%.
Mining firms, which also tend to be among biggest advancers on
upbeat trading days, further posted gains in the FTSE 100. Shares
of Glencore Xstrata PLC (GLCNF) picked up 1.9%, Rio Tinto PLC (RIO)
gained 1.4% and BHP Billiton PLC (BHP) put on 0.6%.
Shares of Anglo American PLC jumped 2.4% after its subsidiary
Anglo American Platinum Ltd. said it resolved strike action
associated with restructuring the business.
Whitbread PLC shares moved 3% higher after Citigroup lifted the
restaurant operator to buy from neutral, with the analysts saying
the firm is "best exposed to the expected rapid economic recovery
that we think is underway in the U.K."
Outside the main index in London, shares of Royal Mail soared
32% to 4.37 pounds ($6.98) on its initial public offering. The
issue price was GBP3.30 a share, and the solid interest fueled
suggestions that the previously state-owned company was sold off
too cheap.
On a more downbeat note, shares of Chemring Group PLC sank 21%
after the provider of defense systems warned its full-year
operating profit will be lower than previously expected because of
the U.S. government shutdown and manufacturing problems.
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