Breaking these figures down into individual stocks presents a more interesting picture. Some of the top gainers from the FTSE 350 were house building companies, with investors buoyed by the Help to Buy scheme, which in the past year has prompted a surge in house prices, especially in London and the south-east.
In the six months after the Budget, Countrywide and Barratt Developments rose, by 28.3% and 23.4% respectively, while Rightmove, the property website, enjoyed a 25.1% rise. The housebuilding sector as a whole has continued to rise, and the decision to extend it to 2020 sets the stage for more gains in this sector.
Also in the list of winners were the pub groups JD Wetherspoon, Enterprise Inns and Mitchells & Butlers. Mr Osborne’s decision to scrap the planned rise in beer duty was partly the result of a sustained effort by the Campaign for Real Ale (CAMRA) that mobilised its members to lobby for a change in policy. Six months on from the Budget, JD Wetherspoon was 28% higher, Enterprise Inns had rallied 25% and Mitchells & Butlers was up 25%. The improving consumer outlook played its part too, with UK drinkers feeling able to spend more of their hard-earned cash in the nation’s pubs.
The chancellor was able to paint a better picture for the future of the British economy. Given the strong performance of the Consumer Discretionary sector, with names such as SuperGroup, Thomas Cook and Dixons all gaining, it seems his confidence was justified.
Looking briefly at the losers, it was the materials sector that was hit hardest. This sector contains the miners, an area almost entirely separate from the British domestic economy. Names like Kazakhmys, Polymetal and Antofagasta all dropped for reasons unrelated to the Chancellor’s performance.
How will Osborne affect markets this year?
This underscores an important point; Britain is not immune from the global economy, and the chancellor cannot boost growth in emerging markets or the eurozone; but he can influence certain areas in the UK. As we look ahead, much of the Budget has, as usual, been flagged up already. But supportive words could help enliven those parts of the FTSE 350 that focus on the UK economy, and so we are looking to homebuilding (and related companies), retail and pub companies for the immediate post-Budget reaction.