FTSE 100 extends gains on Budget day; Micro Focus gets Amazon boost

  • FTSE 100 jumps 75 points
  • Shell and BP boosted by oil rebound
  • Micro Focus flies on AWS deal

The FTSE 100 made a storming start to proceedings ahead of the Budget, which, despite weekend reports of a tax grab, looks likely to be largely fiscally supportive of the pandemic-ravaged UK economy.

Events on Wall Street, which endured another soft session after last week’s inflation wobble, were shrugged off again by London traders.

Crude oil prices helped, as some poise was recovered after the sell-off ahead of OPEC+ meeting Thursday. Royal Dutch Shell (LON:RDSA) and BP (LON:BP.) rose 1.8% and 1.7% respectively.

Polymetal’s (LON:POLY) prelims appeared to please the market as the gold miner topped the Footsie with a 3.3% gain – but for how long with the price of the yellow metal continuing to drift?

Covid bounce-back stocks Whitbread (LON:WTB) and IAG (LON:IAG) were ahead 3% and 1.9% respectively.

Micro Focus (LON:MCRO) was the pick of the FTSE 250 as it advanced 14.5% after inking a big commercial agreement with Amazon Web Services.

6.50am: Index expected to extend gains 

The FTSE 100 index is expected to extend its March gains on Wednesday, ahead of the big Budget announcement from Chancellor of the Exchequer Rishi Sunak this afternoon. 

London’s blue chip equity index was being called 40 points higher by spread-betters on the IG platform, having added 25 points or 0.4% to finish at 6,613.75 the day before. 

Overnight, Wall Street’s main indices all finished lower, with the Dow Jones down 0.5%, the S&P 500 falling 0.8% and the Nasdaq sliding 1.7%.

Allied to increasing coronavirus vaccine optimism, European and US stock futures are being lifted by hopes for the US stimulus package, after approval by the House and now awaiting a green light from the Senate.

“Most of the bets are on the positive side—meaning traders are hoping for support for the relief package from the Senate as well,” says Naeem Aslam at Avatrade.

Joe Biden has also assured Americans that the US will have a large supply of coronavirus available to help every individual in the country by the end of May, which also boosts confidence. 

But in the UK the focus is all on the Budget. 

“It is widely expected that the Chancellor will be using the budget to extend a vast package of covid-19 support, which is likely to last until the end of September. Of course, the Chancellor is betting on a hope that the economy will return from its coronavirus crisis by that time,” said Aslam.

“The furlough scheme was due to end in April, but now, it will run in its current form until the end of June. After that, it is expected to phase out slowly. The key idea over here is to avoid any cliff-edge by withdrawing the furlough support rapidly. 

“Obviously, all of this means a higher bill for the Treasury. The Chancellor will maintain the need to balance the budget once the economy is back on the recovery track. Traders expect to see a future tax rise path that could help repair the damage that has occurred to public financing.”

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were higher on Wednesday as Australia’s GDP rose 3.1% in the December quarter.

The Hang Seng index in Hong Kong surged 2.01% while the Shanghai Composite in China rose 1.66%.

In Japan, the Nikkei 225 gained 0.51% and South Korea’s Kospi rose 1.03%.

Shares in Australia were up, with the S&P/ASX 200 closing 0.82% higher.


Proactive Australia news:

Orthocell Ltd (ASX:OCC) has received notification from the Australian Government Department of Health that CelGro® Dental has been included on the Australian Prostheses List.

Auroch Minerals Ltd (ASX:AOU) has signed a drilling contract with Seismic Drilling Services Pty Ltd that locks in a drill rig for the next 12 months to be used across Auroch’s three high-grade nickel sulphide assets in Western Australia.

Lake Resources NL (ASX:LKE) (OTCMTS:LLKKF) has appointed SD Capital Advisory Limited and GKB Ventures Limited as joint financial advisors to structure and arrange project finance, with a focus on Export Credit Agencies (ECA’s) for the development of the company’s flagship Kachi Lithium Brine Project in Argentina.

PolarX Ltd (ASX:PXX) (FRA:PX0) has successfully staked and registered 96 new federal lode claims to consolidate tenure at Humboldt Range Project in Nevada, USA, more than tripling the size of the land under tenure in the Fourth of July area.

Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is focusing its strategic intent on taking the next step at Big One Deposit within Mt Oxide Project in northwest Queensland’s world-class Mt Isa copper-belt and is starting to prepare the groundwork to potentially recommence mining operations.

Alcidion Group Ltd (ASX:ALC) has signed a contract with New Zealand’s Te Manawa Taki (TMT) region District Health Boards (DHBs) for a pilot implementation of Better’s OPENeP Electronic Medication Management solution.

AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) has received further strong results from several new mineralised zones outside the life-of-mine open pit design at the Manono Lithium and Tin Project in the Democratic Replic of Congo.


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