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

SEAQ TRADES: 83,869

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
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us