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Budget 2017: FTSE 100 Winners and Losers

The FTSE 100 stayed flat following the UK Budget - with slight gains in banking and retailer stocks thanks to upbeat economic forecasts

Karen Kwok 8 March, 2017 | 3:29PM

This week as part of our Guide to ISA Investing we reveal the top rated and top performing stock and fund ideas – as well as sharing where the experts stash their cash, the latest news from the 2017 Budget Report and how to reduce your tax bill.

UK stocks stayed flat this afternoon, following the Spring Budget report from Chancellor Philip Hammond today – despite good news about the economic outlook.

The UK economic growth forecast has been upgraded from 1.4% to 2% for this year, although in 2018 GDP growth is forecast to slow to 1.6%, before picking up to 1.7% in 2019, then 1.9% in 2020, before picking back up to grow 2% in 2021. Economic growth in 2016 was second only to Germany amongst the major advanced economies, growing faster than the US, Japan and France, Hammond added.

“Resilience in the economy is reflected in a strong labour market. Since 2010, the employment rate has risen from 70.2% to 74.6%, with positive news for all parts of the United Kingdom. Unemployment is at an 11-year low, with over 2.7 million more people enjoying the security and dignity of work than in 2010. The inflation forecast is at 2.4% this year, 2.3% in 2018 and 2% in 2019,” said Hammond.

Banking Stocks Rise

Although the stock market on the whole was flat, the improved GDP outlook pushed up shares of UK banking stocks today. Insurer Admiral Group (ADM) was up 2.3% while Barclays (BARC) was up 1.9% and Lloyds (LLOY) was up 1.6%. Supermarket stocks also enjoyed gains. Retailers Marks & Spencer (MKS) and Morrison (MRW) were both up 1.4%.

After the Spring Budget report concluded, Worldpay Group (WPG) the payment processing technology company was the biggest winner in FTSE 100 with 4.2% gains, but this was most likely due to the company announcing dividend of 1.35p per share yesterday.

Residential developer Taylor Wimpey (TW.) and infrastructure trust 3i (III) also gained 1.3% and 2.1% respectively after the Budget announcement as the Chancellor allocated capital to innovation and infrastructure projects.

The Chancellor promised to allocate £270 million to Industrial Strategy Challenge Fund to support collaborations between business and the UK’s science base. Part of this cash will go towards developing batteries for driverless vehicles. He also announced a £690 million fund for local authorities to improve their local transport networks.

Gold miner Randgold Resources (RRS) was the biggest faller – due to the fall in gold price, down 2.3%. The gold price fell in response to a better economic outlook. Pharma stock Hikma Pharmaceuticals (HIK) and Legal & General (LGEN) were also suffered from 1.6% and 1.4% losses respectively.

Budget Under a Brexit Shadow

Today is the last Spring Budget as the Chancellor has rearranged the financial calendar to include a pre-Budget report in March and an Autumn Budget.  This final Spring Budget is one delivered under the shadow of Brexit related uncertainty.

“There is no room for complacency. As we prepare for our future outside the EU, we cannot rest on our past achievements. The deficit is down, but debt is still too high,” the Chancellor admitted.

Therefore it comes as no surprise that the Chancellor adopted a cautious approach to the public finances, said Anna Sptupnytska, global economist at Fidelity International.

“Putting Brexit aside, there are reasons to believe that the public finances are flattering to deceive. Global growth has surprised to the upside over the past year, but looks likely to moderate over the coming months. This less friendly backdrop is likely to weigh on the UK economy and tax receipts. Higher borrowing costs could also blow the public finances off course, with a larger debt pile making the UK much more sensitive to rising yields,” she said.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
3i Ord937.09 GBX-0.31
Admiral Group PLC1,892.91 GBX0.69-
Barclays PLC192.11 GBX0.40
Hikma Pharmaceuticals PLC1,183.28 GBX0.11
Legal & General Group PLC266.64 GBX0.85-
Lloyds Banking Group PLC66.82 GBX0.74
Marks & Spencer Group PLC350.25 GBX0.71-
Morrison (Wm) Supermarkets PLC234.71 GBX-0.12
Randgold Resources Ltd7,400.38 GBX1.10-
Taylor Wimpey PLC204.86 GBX1.26-
Worldpay Group PLC402.00 GBX-0.12-
About Author Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk