LONDON'S leading shares finished the session back in the red after a day in which Saddam Hussein overshadowed Gordon Brown.

There was a muted reaction to the limited number of new measures in the Budget, and a degree of scepticism in the City to the Chancellor's optimistic forecasts for economic growth and public finances.

The benchmark FTSE 100 Index swung between 44 points below its opening mark and 38 points above, before finally closing down 7.4 points at 3861.4.

After a morning spent in negative territory, as traders awaited the Budget statement, the market appeared largely unmoved as the Chancellor finished his 59-minute speech.

But two hours later the Footsie had climbed well into positive territory as the world watched US troops topple a statue of Saddam Hussein in the centre of Baghdad.

As New York's Dow Jones Industrial Average drifted up and down, the Footsie followed suit.

Martin Dobson, of NatWest Stockbrokers, said it was clear investors were now looking to economic prospects rather than the conclusion of war.

He said: "There's not really an awful lot of trading going on and the market's likely to drift. I don't think we will see the market race ahead on a conclusion to the war."

Earlier, analysts agreed that the limited movements were a response to the scenes in Iraq, rather than the Budget.

But 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 finished the session up 9p at 603p while BAT and Imperial Tobacco also gained ground.

News that beer drinkers will pay 1p a pint extra saw shares in Guinness owner Diageo down 7.5p.

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