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FTSE closes 58 points higher after Osborne Budget

George Osborne delivered the first Conservative Party budget for 20 years.

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Workers will earn at least £7.20 an hour from April under the new minimum wage

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UK shares ended the day convincingly higher after George Osborne delivered a first completely Tory Budget for nearly two decades.

The UK benchmark closed up over  58 points, or 0.91% at 6,490, with insurance giant Aviva the biggest gainer - adding 3.5% to 497.10p.

An increase in the insurance premium tax was expected in today’s budget.

Housebuilders made up most of the laggard list as measures in the Budget dented confidence in the sector. Barratt Developments (LON:BDEV) plunged 5.17% to 594.5p , while Taylor Wimpey (LON:TW.) lost 5.01% to 176.20p.

The Greece saga and Chinese stock market chaos was also taking its toll on confidence.

Joshua Mahony at IG index said: "Concern about Greece remains the number one issue influencing market sentiment and largely overshadowed everything else today, including the UK budget. Meanwhile, the crash in Chinese stocks continued apace earlier today, at one point seeing over 37% wiped off the A50 index from the June high."

Among Osborne's measures were changes the child tax credit system, limiting it to two children for new claimants, while notably all benefits for working-age people to be frozen for four years.  People between 18 and 21 will no longer be able to claim housing benefit.

A new minimum wage of £7.20 an hour will be introduced in April next year, rising to £9 a hour from 2020.

Challenger Banks were hit after the Budget. Aldermore (LON:ALD) at 253p, OneSavings Bank (LON:OSB) at 280p, Shawbrook (LON:SHAW) at 326p and Virgin Money (LON:VM.) at 395p, all down between 14% and 9%.

Such firms are expected to have a tougher fight on their hands, now that the Government is reducing the Bank Levy.

In smaller caps, notable risers were Empyrean Energy (LON:ENE), which added 14.89% to 6.75p as ongoing drilling operations at its 3% owned Sugarloaf project delivered a major increase in reserves for the AIM quoted oil firm.

At 12.64mln barrels Empyrean’s proved and probable (2P) reserves have increased by 94%.

These reserves have been independently valued at US$121.7mln, Empyrean told investors.

North Sea junior Independent Oil & Gas (LON:IOG) shares advanced 10% after it revealed a number of key details about a proposed funding deal.

Negotiations are ongoing for the major financing, which would enable several oil field developments, and the company is now arranging a shareholder meeting to expand management authorities so that a deal can proceed quickly once final agreements are made.

Premier African Minerals (LON:PREM) nudged 2.13% higher to 2.40p as it revealed it expects shipments from its RHA tungsten operation in Zimbabwe to start from July 17.

Grades in the initial fines (powdered tungsten) concentrate came in better than expected, Premier African said, and were running up to 70%.

The plant has been running on a 24 hour continuous production cycle since 26 June, though tweaks were still being made to optimise production.

US OPEN

US shares started, as expected, well down as traders flee equities after another bout of sharp selling in Asia overnight.

Around 45% or 1,300 stocks are now suspended in China due to the recent rout, which has wiped trillions off the value of markets, despite huge efforts by the Chinese authorities to quell the tide.

China’s currency, the yuan, also tumbled to a four-year low against the dollar.

The Shanghai Composite Index closed the last session 220 points down, or 5.91% , while the Nikkei in Japan lost 3.13% , or 639 points

For a while, at least , the turmoil has pushed the Greek debt drama to one side, it would appear, though that is very much still in play, with Athens now having been given another final deadline.

Meanwhile, on Wall Street, the Dow Jones opened 191 points lower at 17,590, while the Nasdaq was 63 points down at 4,934. The S&P500 lost 21 at 2,059i in volatile trading.

Major news was that Microsoft said it would cut 7,800 jobs and write down about US$7.6bn related to its Nokia phone business.

In London, FTSE100 is 0.76% higher, with Glencore (LON:GLEN) the  biggest gainer, up 3.105

UK Chancellor George Osborne today delivered the first all Conservative Budget for almost 20 years, which saw income tax changes and sweeping welfare cuts. Also the introduction of a new minimum wage.

Housebuilders were among the early responders to the chancellor, with shares falling sharply.

Barratt Development (LON:BDEV) and Persimmon (LON:PSN) both lost over 5% as changes to tax breaks on buy-to-let properties were unveiled.

London afternoon

London’s stocks rallied strongly as George Osborne delivered the first Conservative Party Budget for twenty years.

Footsie was 76 points higher at 6,510 despite another torrid night for shares in Asia and more uncertainty over Greece.

US futures were pointing to heavy falls ahead of the open with concerns over China and the latest Federal Reserve minutes due this evening.

China, in particular, caused some consternation.

More than 50% of Chinese shares are now suspended due to the recent sell-off, which has wiped trillions off the value of markets in Shanghai.

Greece meanwhile has been given five days to come up with more proposals to appease it creditors or face being booted out of the eurozone.

Its PM Alexis Tsipras expects to present more reforms, while submitting a request from the eurozone’s bailout fund.

Housebuilders were among the early responders to the chancellor.

Barratt Development (LON:BDEV), Taylor Wimpey (LON:TW.) and Persimmon (LON:PSN), down between 3.6% and 2.5%, with changes to tax breaks on buy-to-let properties.

It overshadowed more cuts to corporation tax, which will fall to 18%, and a rise in the personal allowance to £11,000 with £43,000 now her the higher rate kicks in.

Most of the headlines will surround the changes to the welfare spending budget.

The minimum wage rises to £9 per hour, but there were cuts to universal credits and the benefits cap.

Away from the Chancellor, Barclays (LON:BARC) continued to make gains after the bank ousted Antony Jenkins, its chief executive for the past three years.

 “New leadership is required to accelerate the pace of execution going forward,” it said with chairman John McFarlane to be an executive until a replacement is found.

Barclays shares rose by 3% to 260.4p.

Other notable risers included Tesco (LON:TSCO) on reports of more interest in its for sale Asian operations. Shares rose 1.4% to 203.4p.

SSE (LON:SSE) rallied after the report by CMA yesterday on the energy supply industry stopped short of recommending breaking up the big companies. Shares rose 26p to 1,567p.

Companies with exposure to Asian markets were the big losers. HSBC (LON;HSBA), Standard Chartered(LON:STAN) and Prudential (LON:PRU) were all heavily marked down.

Elsewhere, small oilers were mixed.

Independent Oil & Gas (LON:IOG) rose 19% to 17.85p on news of a possible investment for a 29.9% stake for £7.1mln.

Empyrean Energy (LON:EME) climbed 17% to 6.88p on the back of a big resources upgrade on its acreage in the US.

But there were heavy falls of Azonto (LON:AZO) on plans to delist, while Red Rock (LON:RRR) dropped 21% to 0.051p on a new round of funding.

Fevertree Drinks (LON:FEVR) rose 10% to 319p. The fizzy mixers maker had a strong first half to the year with June a particularly good month. 

Most followed

Barclays, the Budget and Greece were unsurprisingly big topics in web world today.

Also in the frame was tube strike news and house prices.

Banking titan Barclays (LON:BARC) headed up Footsie early on, up 3.15%,  as shock news emerged that its chief executive had been ousted,

Antony Jenkins left with a senior independent director citing the need for a “new set of skills” to drive the business forward. He will be replaced on a temporary basis by chairman John McFarlane, who has only been in his current role since April.

The contents of Chancellor Osborne's red case will be closely scrutinised -  but not today, when everyone will just be jumping on the sound bite take-aways. Still, sweeping welfare cuts and income tax changes look like they are on the way.

In Greece, not quite yet a full blown tragedy - the can has been punted or weakly shunted a little further down the road, with Athens having been given till Sunday to reach agreement with its bailout creditors.

It comes after yesterday's emergency summit yet again failed to reach a compromise.

In company news, Eurasia Mining (LON:EUA) was London's biggest riser, up 40%, as the group revealed it had now been granted a milestone mining licence for the West Kytlim project in Russia. Shares were then suspended following a sharp rise in early deals.

The biggest laggard was Azonto Petroleum (LON:AZO). down 45% after last night revealing it was planning to  dispose of its main asset - a 35% stake in Vioco Petroleum to Vitol E&P and cancel the group's AIM listing.

Three may be a magic number but £200,000 is also -  if you're looking to buy a home in the UK that is. The average house price here has now breached the £200,000 mark, according to latest data from Halifax.

Lets hope Mr Osborne is not getting a tube into Westminster as commuters are set to experience major transport disruptions from today, it also emerged

Union’s members are striking ahead of the launch of the 24-hour Tube in September. 


London open

London’s stocks rallied ahead of the first Conservative Party Budget for twenty years, but the market’s attention was gain drawn by the chaos unfolding in China and Greece.

Footsie was 22 points higher at 6,454 despite another torrid night for shares in Asia and more uncertainty over Greece.

A summit last night between European leaders broke up with no deal agreed and a new deadline of Sunday was set for the Greeks to come up with proposals acceptable to its creditors.

Alexis Tsipras, Greece’s PM, said he foresaw a solution by the end of the week but without a deal, Greece’s banks are forecast to run out of cash within days.

Greece’s problems may be small beer soon to judge from where China’s markets are heading.

China and Hong Kong shares crashed as measures taken by the Chinese authorities to shore up its crumbling stock exchanges had little impact.

More than 50% of Chinese shares, 1,267 to be precise, are now suspended due to the recent sell-off, which has wiped trillions off the value of markets in Shanghai and.

China’s currency, the yuan, also tumbled to a four-year low against the dollar.

The turmoil threatened to overshadow Chancellor George Osborne's first post-election Budget.

How exactly he intends to cut £12bn of welfare spending will make the headlines, though the detail is likely to come more in the autumn.

It is thought likely he will raise the threshold for paying the higher 40% rate of income tax to £50,000. He starts talking at 12.30pm.

In what some might suggest was a cynical piece of timing on Budget Day, Barclays (LON:BARC) ousted Antony Jenkins its chief executive for the past three years.

 “New leadership is required to accelerate the pace of execution going forward,” it said with chairman John McFarlane to be an executive until a replacement is found.

Markets weren’t that unhappy with the move with Barclays shares rising by 3% to 260.3p.

Other notable risers included Tesco (LON:TSCO) on reports of more interest in its for sale Asian operations. Shares rose 1.4% to 203.4p.

SSE (LON:SSE) rallied after the report by CMA yesterday on the energy supply industry stopped short of recommending breaking up the big companies. Shares rose 26p to 1,567p.

Companies with exposure to Asian markets were the big losers. HSBC (LON;HSBA), Standard Chartered (LON:STAN) and Prudential (LON:PRU) were all heavily marked down.

Elsewhere, Independent Oil & Gas (LON:IOG) rose 19% to 17.85p on news of a possible investment for a 29.9% stake for £7.1mln.

Fevertree Drinks (LON:FEVR) rose 10% to 319p. The fizzy mixers maker had a strong first half to the year with June a particularly good month. 


London Pre-open

London’s stocks were tipped to rally ahead of the first Conservative Party Budget for twenty years, but the market’s attention is likely to remain on events overseas.

Spread bet firms see Footsie rising by almost fifty points when trading gets underway despite another torrid night for shares in Asia.

The London market closed over 100 points lower at 6,432, mirroring falls across Europe as the Greek crisis stumbled towards another flash point.

A summit last night between European leaders broke up with no deal agreed though a new deadline of Sunday was set for the Greeks to come up with proposals acceptable to its creditors.

Alexis Tsipras, Greece’s PM, said he foresaw a solution by the end of the week. Without a deal, Greece’s banks are forecast to run out of cash within days.

US markets did better with  the Dow Jones Industrial Average adding 93 points to 17,777 and gains also for Nasdaq and S&P 500.

Asian markets took another beating with China and Hong Kong leading the way as measures taken by the Chinese authorities to shore up its crumbling stock exchanges having little impact.

More than 40% of Chinese shares are now suspended due to the recent sell-off, which has wiped trillions off the value of markets in Shanghai and also Hong Kong.

China’s currency, the yuan, also tumbled to a four-year low against the dollar.

The turmoil threatens to overshadow Chancellor George Osborne's first post-election Budget.

How exactly he intends to cut £12bn of welfare spending will make the headlines, though the detail is likely to come more in the autumn.

It is thought likely he will raise the threshold for paying the higher 40% rate of income tax to £50,000. There has also been speculation that Osborne plans to cut the top income tax rate to 40% from 45%.

The Chancellor plans to abolish inheritance tax for couples on all houses worth up to £1 million from April 2017.  The current limit is £650,000.

On the corporate front there will be another house builder showing its financial wares as  of Taylor Wimpey  posts a trading statement.

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