The FTSE 100 and sterling were relatively stable having already absorbed news of an emergency rate cut this morning as chancellor Rishi Sunak announced his first Budget.
The direction of UK stocks seemed to take their cue instead from a significant sell-off in the US as gains made across the Atlantic yesterday were wiped out.
However the massive increases in spending announced by Sunak, including £30bn on coronavirus relief measures, and £175bn in new expenditure over the course of the next five years could have significant implications over time, particularly for certain sectors.
Companies with exposure to the infrastructure space looked to be big winners. Kier (KIE) and Balfour Beatty (BBY) enjoyed double-digit gains as, in a widely expected move, significant outlays were announced on roads, rail, hospitals and broadband.
Motorway crash barrier manufacturer Hill & Smith (HILS) was also in demand, while companies with exposure to the broadband space like BT (BT.A) and Spirent Communications (SPT) received a boost.
The abolition of VAT on digital books boosted publishing firm Bloomsbury (BMY), up 4.6% as investors priced in a potential boost to sales from the move.
The pubs sector in theory should benefit from a freeze on beer duty and discounts on business rates but this has to be set against the loss of trade from coronavirus disruption. Share prices in the sector were unmoved on the news.
Despite plans for £12.2bn investment in affordable homes and the promise of comprehensive reform of the planning system, housebuilders also failed to react.
Infrastructure-related stocks receive Budget boost
Kier +16%
Balfour Beatty +11.4%
Hill & Smith +6%
Breedon +5.5%
Marshalls +3.6%
