Market movers post Budget – stocks, bonds & currencies

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Stocks

“When Mr Hammond stood up the FTSE 100 was trading at 7,448. An hour later, when he had finished, it was almost exactly unchanged,” says AJ Bell Investment Director Russ Mould.

“The only real movers look to have been the housebuilders – Barratt, Persimmon, Taylor Wimpey and Berkeley sank to the bottom of the FTSE 100, with drops of between 1% and 3%. This may reflect some disappointment with the structure of the Chancellor’s £44 billion housing package and the investigation into the pace at which permitted land sees houses actually built. The real secret sauce of being a profitable house builder is to buy land cheaply and even if all builders deny that they budget for any land or price inflation in their business plans there can be no denying that they get a margin boost if the value of the asset then rises over time.

“Estate agents such as Foxtons and Countywide were up, amid hopes for fresh activity amongst first-time buyers

“Cider specialist C&C Group was unchanged despite the increased levy on strong, white ciders, as was alcohol retailer Conviviality. The latter was perhaps helped by the absence of any fresh increases on duty across other spirits wines and beers.

“Even the Chancellor’s initiative to improve fire safety work following the awful events at the Grenfell Tower saw little movement in the share prices of specialists in this field, such as the AIM-quoted Marlowe and Premier Technical Services.

Bonds

“The yield on the benchmark UK 10-year Government bond, or Gilt, barely flinched, trading between 1.28% and 1.29% as bond vigilantes welcomed the Chancellor’s ongoing determination to reduce the annual deficit and rein in the aggregate deficit, at least on a percentage of GDP basis.

Currencies

“The pound largely shrugged off the downgrade to GDP growth forecasts, coming in largely unchanged against the euro just below €1.13 and actually rising against the dollar (after an initial tumble) toward $1.3275.”

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