By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index posted 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.
The FTSE 100 index climbed 0.9% to 6,487.19, the highest 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 has 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.
And on Friday, House Republicans offered the White House a
debt-ceiling increase and an end to the government shutdown in
exchange for spending cuts, the Associated Press reported.
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 1.3%,
HSBC Holdings PLC (HBC) climbed 1.7%, and Lloyds Banking Group PLC
(LYG) added 1.5%.
Mining firms, which also tend to be among the biggest advancers
on upbeat trading days, further posted gains in the FTSE 100.
Shares of Glencore Xstrata PLC (GLCNF) rallied 2.8%, Rio Tinto
PLC (RIO) gained 2.1% and BHP Billiton PLC (BHP) climbed 1.3%.
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 3.1% 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, shares of Royal Mail PLC soared nearly
38% to 4.55 British pounds ($7.26) on its first day of trading. 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.
Shares of Chemring Group PLC sank nearly 23% 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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