UK shares steadied at the close on Wednesday as Britain's budget statement delivered few surprises, although builders got a small boost from reassuring comments on infrastructure spending. Finance minister Philip Hammond stood behind government plans to boost infrastructure spending as he announced a rise in official growth forecasts for this year.
Last November, the government pledged to spend 23 billion pounds in rail, telecoms and housing infrastructure over the next five years. The blue chip FTSE 100 index ended 0.06 percent lower after suffering a four-day losing streak, while strong updates from smaller firms lifted mid caps. The FTSE small cap index hit a record high before closing 0.1 percent firmer.
The construction and materials index outperformed the broader market and closed 0.3 percent higher, with shares in construction and civil engineering firm Costain hitting a new record high. "I think it's a longer term trend that we are going to see increased investment in infrastructure. But a lot of the policies on infrastructure had already been announced," said David Stubbs, market strategist at J.P. Morgan Asset Management.
Banks were in demand with their sectoral index up 0.9 percent. That mirrored gains among US peers after a better-than-expected private sector jobs report cemented expectations for a US rate hike next week. Elsewhere among top movers, Worldpay rose 4.8 percent after J.P. Morgan raised its target price on the stock, while insurer Legal & General fell 2.1 percent after reporting results.
Among mid caps, Restaurant Group jumped 13 percent after the firm said that it has put a brake on expansion plans until it is sure that its brand and location strategy is 'sufficiently robust'. Inmarsat rallied 8.5 percent after results, and security firm G4S gained 8 percent after reporting its first rise in revenue in four years. Crematorium operator Dignity was the biggest faller, slumping 16.9 percent after cutting guidance. The stock was set to post its biggest one-day loss on record.