Market report: Friday close

THE prospect of a postal free-forall left investors scrambling for more shares in Royal Mail's two quoted rivals today.

Business Post and DX have seen a rapid rise in their share prices as the market has eagerly bought into the growth story made possible by the long-awaited liberalisation of the post.

Postcomm's decision to end the Royal Mail's monopoly on all postal services 15 months earlier than expected sparked a new charge. Business Post rose 17½p to 702½p - an all-time high - as investors judged that the one-time West Country courier has finally come of age. Investors were less sure about DX, the postal services business spun out of specialist recruitment firm Hays last year. After initially rising 6p, DX closed ½p higher at 367p.

From next January, Business Post, DX and other licensed companies will be free to collect, transport and deliver all letters, and charge for the service. At the moment, Royal Mail's rivals can only handle bulk mail - more than 4000 items. The postal market is expected to be worth about £5.8bn.

Trading was thin on the main exchange following a subdued opening in America and the FTSE 100 was down 0.2 points at 5,057.2 while the Dow was down slightly at 10,748.

Heavyweight constituent BP was 2½p lower at 555p after a broker downgrade by CSFB to neutral from outperform. CSFB says BP is trading too near its 570p target and has trimmed its earnings estimate this year by 7%.

Cruise operator Carnival saw its shares drop 30p to 3120p after the Arison family announced plans to sell off about 17m shares, or 2% of the company, in the next two years.

Apparently none of the shares marked for sale are directly owned by chairman and chief executive Mickey Arison and the family will still own about 28.6% of the group. With a stock market value of £6.7bn, 2% would be worth around £134m.

US investment bank Goldman Sachs was recommending investors to jump on board BA

Cairn Energy was 50p higher at 1180p on the back of an ABN Amro upgrade following yesterday's posit ive drilling repor t from Rajasthan.

London buses and railway group Go-Ahead

Kingfisher was unchanged at 295p after brokers at JP Morgan took a red pen to their forecasts and downgraded the B&Q owner. It noted the DIY business appeared to be losing momentum faster than the rest of the UK retail sector.

Housebuilders drew comfort from a trio of reports that all seemed to point towards a soft landing for the UK housing market. Wilson Bowden was up 8p at 1,214p, Barratt Development was 6p stronger at 658p, Bellway was 4½p higher at 856p and Persimmon added 10p to 748p.

Asian food entrepreneur Sir Gulam Noon's cash shell Neutralhealth made its debut on Aim today. After listing at 10p, the shares shot up to 16p.

The £2.76m pot will be used to buy food supplement businesses such as probiotic yoghurts and vitamin supplements.