Shares in transport giants rise after spending review

Transport stocks were the main winners from the UK’s comprehensive spending review. Shares rose in the main bus groups after bus operator subsidies were cut by far less than had been feared. The government will cut its rebate on fuel duty by 20 per cent between 2012 and 2015. Expectations had been for a reduction of at least 10 per cent per year, though many thought it could be abolished entirely.

Stagecoach jumped 9.4% on the news, prompting traders to reconsider the possibility of sector consolidation. Shares in Go-Ahead were up 7.7%, FirstGroup rose by 6.4% and National Express rose 4.7%.