Royal Mail in focus as U.S. debt hopes boost UK shares
* Postal service debuts up 36 pct in conditional trading
* FTSE 100 up 0.3 percent
* Whitbread boosted by Citi upgrade
* Alpari targets 6,473 for FTSE 100 near-term
By Tricia Wright
LONDON, Oct 11 (Reuters) - Britain's top shares rose on Friday, with market attention focused on the debut of the Royal Mail postal service, which opened 36 percent up on its issue price after one of the country's biggest privatisations in decades.
After a heavily oversubscribed sale, the shares changed hands at 450 pence in conditional trading and are not due to join indices until Oct 15.
The FTSE 100 extended the previous day's gains, again bolstered by prospects of a deal to end the U.S. debt stalemate.
The index was up 19.76 points, or 0.3 percent, at 6,450.25 points by 0751 GMT, having jumped 1.5 percent on Thursday - its biggest one-day percentage gain since July.
Leisure firm Whitbread firmed 1.4 percent, with traders citing an upgrade to "buy" by Citi, which cited improving macroeconomic conditions that could fuel a rise in hotel stays.
The receding U.S. concerns have seen the FTSE volatility index, a crude gauge of investor fear, fall 18 percent from five-week highs hit on Wednesday. The index was down 5.8 percent on Friday.
Banks were in demand as investors bought into cyclical shares, with Lloyds Banking Group climbing 1 percent after selling its Australian operations to Westpac.
President Barack Obama and Republican leaders appeared ready to end the deadlock after meeting at the White House on Thursday. One senior Republican said an agreement could come on Friday, though hurdles remain.
"Volumes will continue to be light though going into the weekend and gains will be limited as the proposals for the U.S. debt ceiling are still far from a perfect solution," Sanlam Securities' head of trading, Mark Ward, said.
Technical analysts were bullish on the UK benchmark which, on Thursday, pushed through and closed above its 200-day moving average, now at 6,419, following its brief move below the level.
For the near term, Craig Erlam, analyst at Alpari, targeted 6,473, the high on Oct. 4, last Friday's high, followed by 6,507, the 20-day moving average. (Reporting by Tricia Wright; Editing by John Stonestreet)
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