U.K. stocks closed little changed after Chancellor of the Exchequer George Osborne presented his annual budget to Parliament.
J Sainsbury Plc rose 4.5 percent after reporting fourth-quarter sales growth that exceeded estimates. Debenhams Plc climbed as Citigroup Inc. recommended the retailer. Bookmakers Ladbrokes Plc and William Hill Plc declined as Osborne announced a tax on gambling machines. APR Energy Plc plunged 20 percent after delaying the release of its results.
The FTSE 100 Index advanced 0.54, or less than 0.1 percent, to 5,891.95 at the close of trading in London, after alternating between gains and losses at least 10 times. The gauge has rallied 5.7 percent this year as U.S. economic data exceeded forecasts and the European Central Bank funneled about $1.3 trillion to the region’s lenders to support growth. The broader FTSE All-Share Index and Ireland’s ISEQ Index also rose less than 0.1 percent today.
“With no new money and official growth forecasts barely changed after last autumn’s big downgrades, the budget hasn’t changed the fundamental picture,” said Trevor Greetham, who helps manage about $214 billion as director of asset allocation at Fidelity Worldwide Investment in London. “With the global growth backdrop improving the U.K. economy could surprise to the upside. However, the U.K. remains on a path of austerity and growth remains weak.”
Osborne said Britain will avoid sliding back into recession as he delivered a budget intended to maintain his austerity drive. Forecasts from the nonpartisan Office for Budget Responsibility show the economy expanding 0.8 percent this year, up from a November estimate of 0.7 percent, Osborne told Parliament in London today.
“Today’s budget re-affirmed the balance the coalition government is attempting to strike between growth and austerity, whilst not delivering anything dramatic,” Joshua Raymond, chief market strategist at City Index in London, wrote in e-mailed comments.
The FTSE 100 earlier rose as much as 0.5 percent as Bank of England policy makers Adam Posen and David Miles maintained a push for more economic stimulus measures.
Posen and Miles wanted to increase the target for Bank of England bond purchases by 25 billion pounds ($39.6 billion) to 350 billion pounds, according to minutes of the Monetary Policy Committee’s March 7-8 meeting published today. The seven remaining members voted to keep the current target.
Federal Reserve Chairman Ben S. Bernanke said Europe must further strengthen its banks and that its financial and economic situation “remains difficult” even as stresses have lessened, according to testimony today to U.S. lawmakers.
Stocks will probably begin a “steady upward trajectory” over the next few years as any declines in economic growth are already reflected in share prices, Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group Inc. in London, wrote in a report today.
Sainsbury, the U.K.’s third-largest supermarket owner, advanced 4.5 percent to 319.3 pence, gaining for a fourth day. The company reported fourth-quarter sales growth that beat estimates, aided by its “Taste the Difference” food range and online delivery service.
Revenue at stores open at least a year rose 2.6 percent in the 10 weeks to March 17, on a basis that includes value-added tax and excludes gasoline, the London-based retailer said. The growth outpaced the 2.2 percent median estimate of six analysts surveyed by Bloomberg News.
Debenhams, the U.K.’s second-largest department-store company, climbed 2.3 percent to 78.3 pence as Citigroup upgraded the shares to buy.
ARM Holdings Plc, whose chip designs are used in Apple Inc.’s iPad, added 1.5 percent to 593.5 pence. The stock was raised to buy from hold at Peel Hunt LLP. Imagination Technology Group Plc, a computer technology firm, rose 4.5 percent to 703 pence. ARM and Imagination were among picks by Peel Hunt to benefit from the current “tech boom.”
Ladbrokes fell 2.2 percent to 152.5 pence after Osborne said the government will introduce a machine games duty and intends to tax gambling based on where the customer is based, not the company. William Hill dropped 2.1 percent to 243.1 pence, a third day of losses.
Savills Plc, a U.K. property broker, slid 2.4 percent to 373 pence as the chancellor raised the tax on home purchases of 2 million pounds or more to 7 percent from 5 percent.
APR Energy, a supplier of temporary power generation, plunged 20 percent to 884 pence. The company said in a statement it will release 2011 results in mid-April “due to complexities in reporting and accounting for the various corporate transactions which have taken place during the period.”
Horizon Acquisition Co., an investment vehicle backed by Pizza Express founder Hugh Osmond, bought Jacksonville, Florida-based APR Energy in June for $855 million before changing the merged entity’s name to APR Energy Plc in August.
Eurasian Natural Resources Corp. fell 3 percent to 643.5 pence after the producer of metals in Kazakhstan and Africa reported a drop in full-year profit.
Weir Group Plc, the world’s biggest maker of pumps for the mining industry, dropped 6.2 percent to 1,859 pence for the biggest slide in the FTSE 100 as U.S. rival Baker Hughes Inc. said profit is likely to decline.
Logica Plc fell 2.4 percent to 99.05 pence after the Anglo-Dutch computer-services provider was lowered to sell from hold at Societe Generale SA.