The FTSE 100 experienced some fairly wild swings in afternoon trading on Wednesday following the Budget, with a mixed reaction to announcements including the extension of furlough and support for businesses, as well as continued relief on stamp duty and a plan to raise corporate tax to 25%.
Having initially rallied over 1% in morning trade before falling back to trade just 0.2% higher after the Chancellor’s speech, the UK’s leading basket of stocks closed 0.83% higher at 6,668. The more domestically focused FTSE 250 index closed 1.22% up to 21,436.
Sectors which benefitted from the Budget included leisure and hospitality, with pub group JD Wetherspoon (JDW) gaining 6% to £13.21, Premier Inn owner Whitbread (WTB) rising 5.5% to £35.95 and cinema chain Cineworld (CINE) jumping 8.7% to 113.6p.
Housebuilders were also in vogue following the stamp duty news and a Government guarantee on 95% mortgages, with Barratt Developments (BDEV) the top riser in the FTSE 100 having gained over 7% to 732.6p. Other housebuilders which jumped include Persimmon (PSN) and Taylor Wimpey (TW.), rising 6.2% to £28.78 and 5.4% to 174.8p respectively.
Shares in telecom giant BT (BT.A) were also in demand, rising 6.7% to 134.3p, as it is seen as a big beneficiary of the 'super deduction' tax relief available on business investment.
ON CLOUD NINE
Infrastructure software firm Micro Focus (MCRO) was the pick of the FTSE 250 as it jumped 16.5% to 510.9p after inking a big commercial agreement with Amazon Web Services.
The agreement would see the companies 'accelerate the modernization of mainframe applications and workloads' of large enterprises to Amazon's cloud computing products.
Insurance company Hiscox (HSX) tumbled 11.8% to 865.4p after it swung to a $268.5 million annual pre-tax loss, driven by event cancellation and business interruption claims owing to the pandemic.
Hiscox also axed its final dividend, although did say it would consider resuming payments in 2021 when it published interim results.
The rise in Persimmon’s shares came despite it reporting a 25% fall in annual profit and slashing its dividend to 110p per share, after construction markets were battered by the pandemic.
On a brighter note, Persimmon said it was committed to a total dividend of 235p per share in 2021 and was targeting a full return to 2019 home completion levels in 2022.
Polymetal International (POLY) prelims appeared to please the market as shares in the gold miner gained 1% to £14.53 despite gold prices continuing to drift.
Mining titan Rio Tinto (RIO) closed almost flat at £64.35 on announcing that chairman Simon Thompson would stand down next year, joining other leaders that have departed the company after it blasted ancient Australian cave sites.
Senior directors Sam Laidlaw and Simon McKeon would lead the search for Thompson's replacement.
PATENT PROTECTION RULING
Pharmaceutical giant AstraZeneca (AZN) dipped 1.25% to £67.94 after it won a favourable court ruling in the US against Mylan Pharmaceuticals and Kindeva Drug Delivery upholding patent claims.
Gambling software group Playtech (PTEC) added 3.7% to 507p following news that it had appointed Brian Mattingley as its chairman.
Mattingley was currently chairman of rival gambling group 888 and would take up his new role at Playtech on 1 June.
Recruitment company Page (PAGE) edged 0.66% higher to 490p despite booking an 89% slump in annual profit after the pandemic hit job markets.
Page said there remained a high degree of global macro-economic uncertainty in many of its markets, though it was encouraged by recent government announcements about lockdowns easing.
Advertising company WPP (WPP) gained 3.1% to 908.8p having acquired commerce services group for retailers NN4M, for an undisclosed sum. Edinburgh-based NN4M employed 50 people and worked with brands including Selfridges, Nestle and River Island.
Packaging company DS Smith (SMDS) increased 3.5% to 417p on announcing that it was trading in line with its expectations, with higher box volumes offset by a rise in input costs. DS Smith said it had started to recover these additional costs through higher packaging prices.
Africa-focused fuel retailer Vivo Energy (VVO) nudged 1.12% higher to 90.5p, even having booked a 40% drop in annual profit owing to lower demand for petrol during the pandemic. Vivo, however, also said it would increase its dividend payout ratio amid a recovery in trading conditions.
