SUDDENLY the cult of equity seems to be back with a vengeance. For many fund managers, the flight into gilts and bonds was never going to be more than a passing fashion. For them, fixed-interest stocks were an aberration: equities were always going to be king. So it was natural that the market's first reaction to the change in policy back to the old ways was to spurn stocks that most closely resemble gilts - the so-called 'defensive' stocks. Utilities, in particular the regional water and electricity stocks, suffered heavily on Thursday. The reaction might have been overdone, however. Although they recovered partially on Friday, they could climb further with the possibility of higher inflation and the certainty of greater demand. Stocks such as Eastern Electricity (still only 359p, 20p below the year's high and yielding over 6 per cent) and Southern Water (384p, down 8p over the two days and yielding nearly 7 per cent) still look attractive.