Market Report: Budget should be good for shares

EQUITIES SHOULD enjoy Gordon Brown's Budget. Footsie edged forward 12 points as the Chancellor spoke and could move further ahead in the coming weeks.

At the stock market's 4.30 close, eight minutes before the end of the Budget speech, the index stood at 6,237.7, up 28.9.

With the Chancellor seemingly spraying cash around, consumer shares are expected to push ahead. Unchanged beer and spirit duties gave leading brewers late frothiness although the spirits giant Diageo was weighed down by anxiety over tomorrow's results, falling 9.5p to 724.5p.

The corporation tax cuts should also help sentiment. But Government stocks are likely to be subdued by the prospect of more issues to help fund Westminster policies and the reduced chance of more interest rate cuts, a trend that could prompt sterling to strengthen.

Dixons, the electrical retailer, was an early beneficiary of the consumer largess. The shares were riding high on the British Retail Consortium's positive comments about electrical sales. Then came the Budget's pounds 1.7bn "computers for all" plan. The shares rose 50p to 1,268p, another peak. The RM computer group was another to score, up 46p at 625p.

It was not universal cheer. The signalled probe into airport and water companies achieved the predictable reaction. The airport group BAA dropped 10.5p to 965p and water utilities were among the worst performers, giving up 3.6 per cent. Thames Water led the Footsie fallers with a 47p slip to 988p; United Utilities was not far behind, off 33p at 784.5p.

Tobacco shares, on the 17.5p hike in the price of a pack of 20 cigarettes, had a fag-end look. Gallaher lost 15.5p to 414.5p and Imperial Tobacco 4p to 718.5p. British American Tobacco lost 15p to 557.5p.

Normally investors sit on the sidelines on Budget day. Many did. But a big programme trade helped to swell share volume to nearly one billion.

Footsie had a seesaw session. In early trading it recorded a 78.5 gain. By early afternoon it had fallen into negative territory before recovering a little, with the help of New York, before the Chancellor started his address. Supporting shares had a firm time, offering further support to the theory that their long bear run may be over. The mid cap index rose 16.5 to 5,375.7 and the small cap added 7 to 2,322.8.

As on most Budget days, rumours of a major takeover bid went the rounds. A merger between the cable giants Cable & Wireless Communications and Telewest Communications was the hot story. C&WC rose 23p (after 36p) to 735p and Telewest 8.25p to 276p. Any deal would need the say-so of the telecom group Cable & Wireless, which has 53 per cent of C&WC.

Jockeying for Footsie membership went on apace, but some of the moves were lost in the late flurry. Energis, off 42.5p to 1,555p, seemed assured of its place in the charmed Footsie circle; so did the newcomer South African Breweries, up 22.75p at 507.75p.

Misys, the computer group, and the publisher Emap are other contenders. Tomkins, Williams and Safeway are likely casualties.

Action also erupted over mid cap places. Scapa, the chemical group, started the day deep in the danger zone. But in heavy trading it became an indirect beneficiary of the takeover bid for Albright & Wilson. The shares rose 7.5p to 108p as some institutions picked up shares and another withdrew a sale order, apparently taking the view that, with Albright likely to fall to a cash bid, they needed exposure to the chemical industry.

Albright rose 10.5p to 140p on expectations of a counter-bid. Some look for 180p a share. The bid should put Albright, if briefly, into the mid cap index; another expected to join is Waste Recycling.

BT, ahead of a Henderson Crosthwaite investment dinner, rose 14.5p to 1,073p. Hays, the business support group, gained 18.75p to 695.5p on CSFB support, but Great Universal Stores fell 34p to 792p as the investment house said sell. Arcadia retreated 13.5p to 204p on worries about possible profit downgradings.

Profit warnings flowed. Caradon fell 9p to 140p; the engineer Bullough 8p to 69.5p and Geo Interactive Media 4p to 49p. Corporate Services fell another 25p to 88p, thus ending any hopes of retaining its mid cap place, after Monday's profit warning.

Tullow Oil produced an upbeat report on its Egyptian operations but fell 10p to 46.5p. Cambridge Mineral Resources held at 5.5p following encouraging developments from exploration in the Falkland Islands with "visible" gold recovered from three areas.

Hunting improved 8.5p to 130p after clinching a pounds 50m Ministry of Defence contract for mobile biological detection systems.

Euro Sales Finance gained 35p to 345p, reflecting investment meetings. Metal Bulletin, the publisher, rose 25p to 1,350p after reporting little changed profits of pounds 6.8m (pounds 5.9m) and forecasting "infill" acquisitions.

SEAQ VOLUME: 992.9 million


GILTS INDEX: 112.5 -0.53

THE MARKET'S love affair with anything related to the Internet is underlined by the breathless display of Sports Internet.

On the second day of trading the shares surged 26.5p (after 50p) to 155p; they had arrived on the market at 55.5p. The company is highly ambitious, but it is still very much a blue-sky venture. It is looking for sports operations with Internet links, but it will have to run hard to justify its capitalisation of pounds 10.1m.

DRS DATA & Research firmed 1.75p to 13.75p as the market realised that its pounds 4.2m cash and near-cash was around the same as its capitalisation.

The optical scanner group provided further encouragement for its hard- pressed shareholders by slicing losses from pounds 826,000 to pounds 26,000. The shares have suffered an appalling run as profits were transformed into losses. They were at one time 120p. In August the price was down to 10p.

Suggested Topics
Life and Style
Customers can get their caffeine fix on the move
food + drink
Life and Style
techCould new invention save millions in healthcare bills?
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Flat out: Michael Flatley will return to the stage in his show Lord Of The Dance
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Jermain Defoe got loads of custard
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

.NET Developer

£600 per day: Harrington Starr: .NET Developer C#, WPF,BLL, MSMQ, SQL, GIT, SQ...

Data Centre Engineer - Linux / Redhat / Solaris / Puppet / SAN

£65000 per annum: Harrington Starr: A financial software vendor at the forefro...

Business Analyst

£250 - £350 per day: Orgtel: Business Analyst, Bristol, Banking, Business Obje...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape