Bank stocks boost UK shares ahead of budget

imageStock Markets3 hours ago (Mar 03, 2021 09:35)

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London

By Shivani Kumaresan

(Reuters) – British shares rose on Wednesday, buoyed by gains in banking stocks, while investors awaited Finance Minister Rishi Sunak’s budget plan as the country tries to recover from a coronavirus-inflicted economic shock.

The blue-chip FTSE 100 index rose 1.3%, with banking stocks, mainly HSBC Holdings Plc (LON:HSBA), Barclays (LON:BARC) Plc and Standard Chartered (LON:STAN) Plc gaining between 2% and 2.6%.

Mining stocks including Glencore (LON:GLEN) Plc, Anglo American (LON:AAL) and BHP were among the biggest boost to the index, followed by oil heavyweights BP (LON:BP) and Royal Dutch Shell (LON:RDSa).

“There is a clear case made for gradual rise in the corporate tax and in particular to balance fiscal burden in future,” said Stefan Koopman, senior market economist at Rabobank.

“The government will seek to get more money in the pockets of people and businesses, and it is not a bad thing for equities, especially as many businesses rely on consumption from households.”

Sunak is likely to promise to do “whatever it takes”, including a five-month extension of Britain’s huge jobs rescue plan, to steer the economy through what he hopes will be the final months of COVID-19 restrictions.

The budget announcement is expected at 1230 GMT

The FTSE 100 has recovered more than 35% from a coronavirus-led crash last year, helped by a raft of stimulus measures and faster vaccine rollouts. But investors are cautious about a rise in inflation and policy tightening, as lockdowns start to ease.

The domestically focused mid-cap FTSE 250 index rose 1.3%, led by industrials stocks. The services activity data for February is expected at 0930 GMT.

Polymetal, one of Russia’s largest gold and silver producers, rose 2.1% after posting a record high net earnings in 2020.

Recruitment firm PageGroup rose 1.8%, despite a 90% slump in annual profit, while Britain’s second-largest homebuilder Persimmon (LON:PSN) rose 4.1%, as it targeted a full return to pre-pandemic new home completion levels next year.

Bank stocks boost UK shares ahead of budget

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