FTSE 100 movers: Housebuilders, travel plays lead post-Budget gains

London’s top-flight index was still in the green on Wednesday afternoon following Rishi Sunak’s Budget announcement, though stocks had given up some of their earlier gains in the wake of the news that corporation tax would rise from 2023.

Travel and leisure stocks were among the top performers, with British Airways and Iberia owner IAG and Premier Inn owner Whitbread making strong showings.

Housebuilders were also in the green after the Chancellor confirmed that the stamp duty holiday would be extended, and announced a mortgage guarantee scheme providing for 95% mortgages for first-home buyers.

Barratt Developments, Persimmon and Taylor Wimpey were all in the green.

Persimmon had earlier told the market that its forward sales were 15% higher than a year ago as it reported an 18% decline in annual profit.

BT Group shares also surged, after chancellor Rishi Sunak announced in his budget a new investment tax super deduction policy.

Under the scheme - which Sunak hailed the "biggest business tax cut in modern British history" - companies investing in new plant and machinery assets in the next two years will be able to cut their tax bills by 130% of the cost.

The super deduction will allow businesses to reduce their tax bill by up to 25p for every £1 they invest. This is worth around £25bn to UK companies over the two-year period the scheme will be in effect.

BT, which is currently investing millions of pounds to upgrade its UK broadband network to fibre optic, rallied on the news and by 1510 GMT, the shares were trading up 6.2% at 133.65p.

“There was plenty for investors to like in Rishi Sunak’s budget, including the extension of furlough until September, an extension to the stamp duty holiday to June, and £5bn in restart grants for businesses,” said Spreadex analyst Connor Campbell.

“Growth forecasts also improved, though the Chancellor did state that the economy will be 3% smaller in five years’ time than it would have been without the impact of Covid-19.

“What perhaps put investors off was an increase in corporation tax to a still-G7 low 25%, alongside news that the total cost of the pandemic response will hit £407bn by the end of 2022.”

On the downside, Avast led the losers even after it reported a rise in full-year profit and revenue, underpinned by growth in its consumer direct desktop business as more people worked from home due to the pandemic.

Online grocer Ocado and Just Eat Takeaway - two firms that have benefited greatly from the various lockdowns amid the Covid-19 pandemic - were also on the back foot, as the Chancellor’s speech reiterated the government’s “irreversible” plan to gradually take England out of its current restrictions.

Market Movers

FTSE 100 (UKX) 6,642.60 0.44%
FTSE 250 (MCX) 21,366.44 0.89%
techMARK (TASX) 4,040.49 0.51%

FTSE 100 - Risers

BT Group (BT.A) 134.30p 6.67%
Barratt Developments (BDEV) 724.80p 5.93%
International Consolidated Airlines Group SA (CDI) (IAG) 214.00p 5.57%
Whitbread (WTB) 3,589.00p 5.37%
Persimmon (PSN) 2,849.00p 5.13%
Taylor Wimpey (TW.) 174.30p 5.06%
Barclays (BARC) 168.50p 3.87%
Melrose Industries (MRO) 174.60p 3.68%
Standard Chartered (STAN) 499.00p 3.44%
Informa (INF) 569.00p 3.19%

FTSE 100 - Fallers

Avast (AVST) 441.00p -5.00%
Scottish Mortgage Inv Trust (SMT) 1,148.00p -3.85%
Ocado Group (OCDO) 2,102.00p -3.71%
Severn Trent (SVT) 2,158.00p -2.92%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,716.00p -2.84%
SSE (SSE) 1,299.00p -2.51%
Rightmove (RMV) 582.60p -2.38%
Smith & Nephew (SN.) 1,356.50p -2.30%
Croda International (CRDA) 6,178.00p -2.25%
Antofagasta (ANTO) 1,813.00p -2.16%