UPDATE 2-Banks, homebuilders shine as British shares rally on budget boost

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Sunak extends COVID rescue plan but moves to bring in more
tax
* Micro Focus to collaborate with AWS; shares surge
* Pub operators rise on VAT cut, commercial property tax
holiday
* FTSE 100 up 0.9%, FTSE 250 adds 1.2%

(Adds comment, details; Updates to close)
By Devik Jain and Shivani Kumaresan
March 3 (Reuters) - British shares rose on Wednesday, buoyed
by gains in financial, leisure and homebuilding stocks as
investors cheered finance minister Rishi Sunak's budget plan to
steer the economy out of a coronavirus-inflicted shock.
The blue-chip FTSE 100 index .FTSE closed 0.9% higher,
with shares of top three British homebuilders Barratt
Developments BDEV.L , Persimmon PSN.L and Taylor Wimpey
TW.L gaining between 6% and 7%.
The wider housebuilder index .FTNMX3720 added 2.8%, while
banking stocks .FTNMX8350 were among the top boosters.
Delivering an annual budget speech on Wednesday, Sunak
extended costly emergency programmes, including a five-month
extension of Britain's huge jobs rescue plan and more help for
the self-employed, but also announced a future tax squeeze as he
began to focus on the huge hole in the public
finances. "Sunak's budget signalled the UK economy is almost ready to
leave crisis mode," said Edward Moya, senior market analyst at
OANDA in New York.
"The UK will have a great 2022, but the economy will return
to trend in 2023. The withdrawal of stimulus and higher taxes
will complicate the outlook after next year."
The FTSE 100 has recovered more than 35% from a
coronavirus-induced crash last year, helped by a raft of
stimulus measures and faster vaccine rollouts. But investors are
cautious about a rise in inflation and policy tightening as
lockdowns start to ease.
The domestically focused mid-cap FTSE 250 index .FTMC
ended 1.2% higher, led by a 13.6% jump in Micro Focus
International's shares MCRO.L after the IT firm said it joined
hands with Amazon.com Inc's AMZN.O cloud computing division to
help customers migrate their mainframe applications and
workloads to the platform. Travel and leisure stocks also supported the index, with pub
operators Marston's Plc MARS.L , Mitchells & Butlers MAB.L
and J D Wetherspoon JDW.L gaining between 3.1% and 6% after
the UK extended a value-added tax (VAT) cut for cafes,
restaurants and hotels by six months until Sept. 30.

Get The App

Join the millions of people who stay on top of global financial markets with Investing.com.

Download Now