By Atul Prakash and Sudip Kar-Gupta
LONDON (Reuters) - The FTSE edged higher after setting a three-week low on Thursday, with Royal Mail (LONDON:RMG) gaining on the prospect of lower competition and energy shares tracking a rise in oil prices.
Royal Mail led the blue-chip FTSE 100 index, with the company's shares rising 5.2 percent after Dutch rival PostNL abandoned talks with LDC on plans to expand PostNL's 'Whistl' unit in Britain.
Among top sectoral gainers, the UK Oil and Gas index rose 0.7 percent after crude oil prices hit a five-month high on a weaker dollar and on signs that U.S. production had eased and refinery demand had picked up.
"Stronger oil prices have provided some support to the energy sector, while yesterday's strong market sell-off will have tempted investors to look for bargains," Augustin Eden, analyst at Accendo Markets, said.
"On a company level, Royal Dutch Shell (LONDON:RDSa)'s move to maintain its dividend added to relatively good performance in its downstream operations to negate a fall in profits and put it in line with sector peers."
Shares in Royal Dutch Shell rose 0.7 percent after it reported stronger than expected profits thanks to refining, which proved valuable in the recent oil price downturn, joining a trend set by rivals BP (LONDON:BP) and Total earlier this week.
The blue-chip FTSE 100 index, which hit an all-time high of 7,122.74 points on April 27, was up 0.3 percent at 6,966.33 points by 1010 GMT after falling to a three week low earlier in the session.
Gains were capped by uncertainty over next week's British general election. Opinion polls put the governing Conservatives neck-and-neck with the opposition Labour party, while the Scottish National Party could emerge as the third largest party.
Investors tend to be wary of Labour, which has vowed to regulate utilities and hike taxes on banker bonuses. But analysts say a Conservative win could trigger economic uncertainty because of a party promise to hold a referendum over Britain's membership of the European Union.
Royal Bank of Scotland (LONDON:RBS) fell 2.6 percent after the state-backed bank set aside 856 million pounds to cover charges for past misconduct and litigation, pushing RBS to a first quarter loss.
Several stocks, including utility Centrica (LONDON:CNA) and media group ITV (LONDON:ITV), went "ex-dividend" - meaning they were trading without the attraction of their latest dividend, which in turn took some points off the FTSE in a technical adjustment.
Outside of the blue-chip FTSE 100 index, mid-cap stock Zoopla Property Group surged 13 percent after Zoopla agreed to buy the company behind price comparison website uSwitch.com.