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March 8, 2017, 12:08 p.m. EST

FTSE 100 posts 5th drop in a row after U.K. budget outlined

Growth outlook for 2017 upgraded

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By Carla Mozee, MarketWatch


Reuters
Britain’s Treasury chief Philip Hammond.

U.K. stocks ended a highly volatile session slightly lower on Wednesday after the British government laid out plans for spending and taxes as it works to exit from the European Union.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.67% ended roughly 0.1% lower at 7,334.61 for a fifth straight session of losses. That marked the longest losing run for the index since early November.

Budget: U.K. Treasury chief Philip Hammond outlined the last budget before the U.K. begins its flight out of the European Union. He said the 2017 forecast for British economic growth was upgraded, to 2% from a previous estimate of 1.4%. But growth is expected to slow in 2018.

The budget included a reduction in the tax-free dividend allowance to £2,000 ($2,430) from £5,000, and a two-tier sugar tax levy. Soft drinks producers A.G. Barr PLC /zigman2/quotes/206898740/delayed UK:BAG +1.31% and Britvic PLC /zigman2/quotes/208055220/delayed UK:BVIC +3.63%  lost 1.3% and 0.8%, respectively.

Hammond also said there will be a £1,000 discount for pubs on business rates, which should affect 90% of pubs in Britain. Shares of Punch Taverns PLC  rose 0.9%, but Greene King PLC  gave up 0.2%.

“It’s very much a steady-as-she-goes budget for a country that’s about to embark on a very tricky two years,” as Brexit is negotiated, said IG’s chief market analyst Chris Beauchamp.

See: Analysts react to the U.K.’s spring budget

Sterling: Beauchamp said the higher 2017 growth projection and a lower borrowing outlook helped pull the pound from session lows.

“Borrowing is going to be down and it’s presuming a better outlook for the government on that front. Of course, you worry about whether everything will be quite as strong given Brexit. But certainly the mood music there is strong for the pound,” he said.

Sterling /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1112%  was trading at $1.2154, but still down from $1.2200 late Tuesday in New York. The yield on the 10-year gilt /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y +4.04%  rose further, by 5 basis points at 1.23% as prices fell. Read more in Currencies.

Movers: Mining shares flipped lower, with a climb in the U.S. dollar /zigman2/quotes/210598269/delayed DXY +0.15%  hitting dollar-denominated metals prices. Shares of Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +3.70%  fell 1.8%, BHP Billiton PLC   /zigman2/quotes/208108397/composite BHP +2.05%   /zigman2/quotes/201448516/delayed AU:BHP -0.06%  declined 1.2% and Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO +2.07%   /zigman2/quotes/202627887/composite RIO +1.71%   /zigman2/quotes/200083756/delayed AU:RIO +0.89%  was pushed down 0.9%.

But mining shares earlier Wednesday rose after China posted an unexpected trade deficit. The “recent strength of import growth appears to largely reflect a boost to import values from a jump in commodity price inflation,” Capital Economics economist Julian Evans-Pritchard noted Wednesday.

Admiral Group PLC shares /zigman2/quotes/201079056/delayed UK:ADM +2.12%  rose 1.7% after the auto insurer said its pretax profit in 2016 fell 24% because of a change in the discount rate used to calculate personal injury damages awards.

Legal & General Group PLC /zigman2/quotes/201125471/delayed UK:LGEN +2.75%  raised its dividend, but shares of the company, which provides insurance, savings and investment services, turned lower to close down by 2.1%.

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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,513.44
+123.46 +1.67%
Volume: 647,826
May 23, 2022 4:59p
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/zigman2/quotes/206898740/delayed
UK : U.K.: London
543.00 p
+7.00 +1.31%
Volume: 243,561
May 23, 2022 4:35p
P/E Ratio
21.77
Dividend Yield
2.21%
Market Cap
£596.29 million
Rev. per Employee
£269,138
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/zigman2/quotes/208055220/delayed
UK : U.K.: London
843.00 p
+29.50 +3.63%
Volume: 540,004
May 23, 2022 4:35p
P/E Ratio
21.85
Dividend Yield
3.02%
Market Cap
£2.18 billion
Rev. per Employee
£333,753
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2574
-0.0014 -0.1112%
Volume: 0.0000
May 24, 2022 2:49a
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/zigman2/quotes/211347177/realtime
add Add to watchlist BX:TMBMKGB-10Y
BX : Tullett Prebon
1.97
+0.08 +4.04%
Volume: 0.00
May 23, 2022 5:01p
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/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
102.23
+0.15 +0.15%
Volume: 0.00
May 24, 2022 2:39a
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/zigman2/quotes/201381512/delayed
UK : U.K.: London
3,654.00 p
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May 23, 2022 4:35p
P/E Ratio
7.36
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5.86%
Market Cap
£47.13 billion
Rev. per Employee
£474,259
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US : U.S.: NYSE
$ 68.70
+1.38 +2.05%
Volume: 3.92M
May 23, 2022 4:00p
P/E Ratio
10.48
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10.19%
Market Cap
$167.84 billion
Rev. per Employee
N/A
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AU : Australia: Sydney
$ 47.80
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P/E Ratio
10.75
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Market Cap
$238.80 billion
Rev. per Employee
N/A
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/zigman2/quotes/208934945/delayed
UK : U.K.: London
5,562.00 p
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P/E Ratio
5.92
Dividend Yield
12.78%
Market Cap
£90.68 billion
Rev. per Employee
£935,616
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/zigman2/quotes/202627887/composite
US : U.S.: NYSE
$ 70.73
+1.19 +1.71%
Volume: 3.01M
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P/E Ratio
5.44
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11.20%
Market Cap
$113.05 billion
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$1.29M
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AU : Australia: Sydney
$ 110.47
+0.97 +0.89%
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May 24, 2022 4:10p
P/E Ratio
6.43
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9.83%
Market Cap
$160.85 billion
Rev. per Employee
$1.71M
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/zigman2/quotes/201079056/delayed
UK : U.K.: London
2,220.00 p
+46.00 +2.12%
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May 23, 2022 4:35p
P/E Ratio
11.16
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12.57%
Market Cap
£6.52 billion
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£136,604
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/zigman2/quotes/201125471/delayed
UK : U.K.: London
257.80 p
+6.90 +2.75%
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May 23, 2022 4:35p
P/E Ratio
7.92
Dividend Yield
7.16%
Market Cap
£14.89 billion
Rev. per Employee
£1.28M
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Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

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