Wednesday, 18 March 2015 21:01
LONDON: Britain’s top share index was the sole major European index to trade higher on Wednesday as oil shares and financial companies drew a boost from changes announced as part of the UK government’s new budget.
Shares in fund supermarket Hargreaves Lansdown and wealth manager St James’s Place rose 6.2 percent and 3.5 percent respectively after the British government announced fresh changes to the savings system in its last budget before the May 7 general election.
Finance minister George Osborne said savers would now have the flexibility to remove money from their tax-free Individual Savings Account and replace it within the same year without losing out on the tax break.
Oil stocks also rallied after the government announced tax breaks for North Sea firms. Energy stocks added 13 points to the index, although with the news widely anticipated, some of the sharpest individual movers struggled to hold onto gains.
“In terms of the stock market, this going to be good for resource stocks, investment banks and funds,” David Papier, head of sales trading at ETX Capital, said. “Giving the high weighting of these sectors, this could push the FTSE into territory we’ve not seen before.”
Pub operator JD Wetherspoon also rose after Osborne announced a cut in tax on beer.
Britain’s FTSE 100 was up 76.50 points, or 1.1 percent, at 6,914.11, extending gains as the UK government raised its growth forecast for the year.
It outperformed Germany’s Dax, France’s CAC and Italy’s FTSE MIB, which were flat to 0.9 percent lower. The FTSE is up 3.3 percent from last week’s low, leaving it just 0.9 percent off an all time high set on March 2.
Standard Chartered was up 7.8 percent, the top FTSE 100 riser, lifted by positive broker comment. Barclays welcomed the appointment of former JP Morgan investment bank boss Bill Winters, announced last month, lifting its rating on the stock to “overweight” from “equal weight”.
“We expect the appointment of a new CEO to mark a turning point for Standard Chartered and see plenty of scope for the business to be refocused with a material improvement in returns,” analysts at Barclays said in a note. The stock also benefited from an upgrade by Bernstein.
Volume on Standard Chartered shares was 120 percent of its full-day average for the past 90 days by 1420 GMT, compared with just a half on the broader index.
Copyright Reuters, 2015
