London posts modest gains as budget fails to inspire

The FTSE 100 Index finished 4.25 points ahead at 5677.88 as Mr Darling said borrowing would be 11bn below forecast this year, but there were few policy give-aways in a fiscally-neutral Budget.

Tim Hughes, head of sales trading at IG Index, said: "This year's Budget isn't likely to start any financial fires, and with Mr Darling perhaps more concerned with putting out political ones the announcement seems to have been something of a non-event."

A rare exception was the lifting of the stamp duty threshold to 250,000 for first-time buyers, which helped a raft of housebuilders in the FTSE 250.

The aid to the housing market saw Bellway add 401/2p to 760p – also helped by decent results – Barratt cheer 37/8p to 1281/2p, and Persimmon advance 133/4p to close at 4593/4p.

Wall Street offered little support to the top flight after early falls while more sovereign debt spectres helped the dollar strengthen against the euro and sterling, pushing the pound back below 1.50.

Sales of newly built homes in the US fell for a fourth straight month to a record low in February, but another rise in new orders for durable goods offered hope that the economic recovery remained on course.

The Commerce Department yesterday said sales of new single-family homes fell 2.2 per cent to a 308,000 unit annual rate from 315,000 units in January. Markets had expected sales to edge up to a 320,000 unit annual pace.

In a second report, the department said orders for long-lasting manufactured goods rose 0.5 per cent in February, rising for the third straight month, and January's figures were revised sharply upward to show a 3.9 per cent increase. In London, travel firms gave back early gains after Thomson Holidays owner TUI Travel said demand for holidays was continuing to improve strongly.

TUI edged 3p down to 3011/4p as shares took a breather after recent strong gains, but fellow tour operator Thomas Cook crawled 1/4p ahead to 2561/8p after leading the Footsie early on. Hedge fund giant Man Group was a prominent riser, adding 4p to 2463/4p, or 2 per cent, despite another fall in assets under management in a trading update.

Investors took heart from a better recent performance by its AHL fund and its decision to hold the dividend unchanged.

Industrial engineering firm Smiths Group also gained after the firm lifted interim profits 7 per cent despite flat sales and said it was "well-placed" for the rest of the year. Shares added 17p to 1156p.

But fourth quarter figures from supermarket Sainsbury's failed to add momentum to its shares, which lost 1/2p to 3275/8p as it confirmed expectations for a further slowdown in sales, up 1.7 per cent in the 11 weeks to March 30.

Top-flight fallers included life and pensions giant Aviva and InterContinental Hotels, down 173/4p to 3833/8p and 21p to 1019p respectively after the stocks turned ex-dividend.

All Bar One pubs group Mitchells & Butlers gained 107/8p to close at 302p in the FTSE 250 after the firm announced a strategic review which will see it concentrate on growing its food business.

Elsewhere, low cost carrier easyJet confirmed that Guardian Media Group chief executive Carolyn McCall is to become its new boss.

Shares in the airline were down 45/8p to 4487/8p.

The biggest Footsie risers were Petrofac ahead 27p to 1255p, Shire up 31p to 1509p, Lloyds up 11/4p to 641/4p and Man Group.