Budget sends Footsie down

London’s leading shares endured a nervy session today as investors watched for positive news from both the war in Iraq and British Chancellor Gordon Brown’s budget announcement.

Trading levels stayed low before the lunchtime Budget statement and only the hugely-symbolic destruction of a Saddam Hussein statue in central Baghdad helped propel the FTSE 100 Index above its opening mark.

But by the end of trading, the Footsie had slipped back into negative territory, closing down by 7.4 points at 3861.4.

Earlier in the day news that the UK’s trade deficit had widened due to falling exports also helped inject a more sober note as the market drifted lower.

Later investors appeared to take heart from jubilant scenes in the Iraqi capital which raised hopes of a swift end to the war with the Footsie shooting up by almost 40 points. The Budget statement meanwhile had little impact on share prices.

With the mood of euphoria seen earlier in the week as US troops entered Baghdad now over, investors’ were largely focused on the economy.

Wall Street markets did little to help confidence after opening lower today. By the time London closed, the Dow Jones Industrial Average was teetering just above its starting point.

In London, Mr Brown’s announcement that duty on a packet of 20 cigarettes would rise by 8p – in line with inflation – came as a relief to investors in tobacco companies.

Gallaher was among the FTSE 100 risers with a 9p gain to 603p. BAT also featured, rising 6.5p to 594p.

Also on the move was ICI after the paints and chemicals group announced the departure of its chief executive Brendan O’Neill.

He presided over a profits warning last month and paid the price at a board meeting yesterday.

Shares rose 3.5p to 107.75p, as investors welcomed his successor, ICI Paints boss John McAdam.

Fallers on the top flight index included Argos-owner GUS, which suffered after US-based rival Acxiom, which provides a similar credit checking service to GUS’ Experian, warned on profits overnight. Shares lost 17.25p at 511p.

And high street retailer Marks & Spencer, which yesterday revealed a drop in non-food sales, lost 5.25p today to reach 275.5p.

Yates Group saw shares jump 13% after it said a revamp of its Yates’s bars had started to pay off. Shares gained 6.5p to reach 57.5p.

But the going was tough for bookies Stanley Leisure after it warned some unfavourable results, including at the Cheltenham festival, would leave its mark on City forecasts. Shares slumped 24% or 88p to 279.5p.

Heading the Footsie risers were Abbey National up 13.25p at 403.25p, ICI up 3.5p at 107.75p, Reckitt Benckiser up 31.5p at 1122p, and Hanson up 8p at 338.75p.

The fallers were GUS down 17.25p at 511p, Legal & General down 2.5p at 75p, Provident Financial down 19p at 578p, and Standard Chartered down 21p at 677p.