UK shares rise as bank tax surcharge proves less severe than feared
EWU•UK shares edged higher after finance minister John Healey announced a temporary increase in the bank profit surcharge to 6% from 3% for 15 months, less than feared. The FTSE 100 rose 0.2%, while the FTSE 250 gained 0.1%.
1. Banks lead gains
The FTSE 100 rose 0.2% by 1428 GMT on Wednesday, while the FTSE 250 inched up 0.1% to a nearly two-month high. Shares of Llyods Banking Group, Natwest and Barclays gained between 2.2% and 3.7% after Healey announced the temporary bank surcharge increase. Christopher Peters of Accendo Markets described the move as a halfway compromise that the market had taken well.
2. Other market moves
UK betting firms rose after the government announced a smaller-than-feared gambling tax increase, with Machine Games Duty rising to 25% from 20%. Entain gained 4.5%, Evoke rose 4% and Playtech added 1.4%. Standard Chartered gained 3.5% after raising its full-year growth and profitability targets following third-quarter income that beat estimates. Unilever fell 1.8% after softer foods results, and GSK dropped 4%.
3. Investors weigh other factors
British bond, stock and currency markets were largely sanguine after the budget announcement, which included energy-bill subsidies and a freeze in fuel duty. Investors were awaiting the Federal Reserve's policy decision and earnings from major U.S. technology firms. Brent crude futures rose 1.3% to $115.41 a barrel after an attack on a Saudi Arabian refinery renewed concerns over potential supply disruptions.
