FTSE 100, European markets close higher following UK budget
written by Bella PalmerThe FTSE 100 increased by 0.3% to reach 7,672 points, while the FTSE 250, which is more focused on domestic affairs, closed 1% higher
The FTSE 100 and European markets closed the day on a positive note in London, following the announcement of the UK government's spring budget.
The FTSE 100 increased by 0.3% to reach 7,672 points, while the FTSE 250, which is more focused on domestic affairs, closed 1% higher. The pound also showed a slight rise against the dollar, reaching just above $1.27. In Germany and France, the DAX and CAC experienced gains of 0.1% and 0.3% respectively. Traders seemed to be optimistic after UK chancellor Jeremy Hunt revealed a reduction in national insurance and the introduction of a new British ISA.
The chancellor’s budget has sought to address the drop in the proportion of UK pension fund assets invested in UK assets and in doing so, tackle the deep and well-documented valuation discount that the UK equity market trades on, according to Indriatti Van Hien, portfolio manager on the UK equities team at Janus Henderson Investors.
The announcement of a new British ISA and the requirement being placed on pension funds to disclose the proportion of assets invested in the UK are clear first steps taken to reinvigorate the UK equity market. Incentivising increased investment in UK listed assets should enhance the attractiveness of the UK stock market to fast-growing innovative companies which will let UK pension funds share in the capital growth and success of such firms. It is a virtuous circle and we welcome such developments, she added.
In Asia, trading was mixed, with the Nikkei in Japan showing a lacklustre performance and the Hang Seng in Hong Kong recording strong gains. The Hang Seng surged by 1.7%, recovering from losses seen the previous day due to concerns about the Chinese economy.
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