Pre-Budget jitters slow down FTSE
A respite from higher oil prices could not persuade investors to come off the sidelines in London ahead of today’s Budget speech.
News that oil cartel Opec had agreed to raise production was a bright spot on an otherwise dour day for the FTSE 100 Index when all the gains of the previous session were eliminated.
British Airways was among blue-chip stocks to benefit from the Opec decision, but many others were mired in negative territory as the Footsie fell by 31.6 points to 4968.6 by mid-morning.
Investor caution reflected the uncertainty over details of the Budget, which is expected to involve a string of incentives that will effectively launch Labour’s election campaign.
Economists are hoping that Chancellor Gordon Brown will resist the urge to go on a spending spree that would imperil his fiscal rules and push the nation’s finances deeper into the red.
A feature of the London market today was the number of major firms going ex-dividend, meaning investors no longer have the right to recent payments. Lloyds TSB fell 5% or 25p to 483p, Prudential eased 9.5p to 494.5p and HBOS slipped 25.5p to 829p.
Smiths Group was among the Footsie fallers, off 11.5p at 830.5p, despite raising its interim dividend by 6% and sounding an optimistic note about prospects.
Elsewhere, urban regeneration specialist Crest Nicholson leapt 12% or 47.25p to 444p after rejecting a preliminary takeover approach from its biggest shareholder as too low.
The prospect of consolidation in the construction and housebuilding sector benefited a string of Crest’s rivals, including Barratt Developments which added 20p to 656p and Bellway, up 22p at 885p.
Entertainment group Chorion was up 5p at 316p after reporting a 35% hike in annual profits and reporting a doubling in a major order from ITV for new Agatha Christie films.
