There were sharp falls throughout the sector, with generators and regional electricity shares suffering acute discomfort.
Much of the committee's report had been expected. But surprise suggestions of Whitehall price restrictions on the generators and the possibility of a review of pricing controls on the distributors did the damage.
Bill Dale, at SG Warburg, believes the stock market reaction was wrong. 'I do not expect either suggestion will be taken up by the Government,' he said.
The electricity stocks, however, looked vulnerable. They have risen strongly and many were standing at their peaks before the coal report appeared.
National Power fell 10.5p to 293.5p and PowerGen 14p to 296p. Among the distributors, Manweb lost 10p to 476p; London Electricity 17p to 422p and Southern 17.5p to 417.5p.
Elsewhere the multi-million- pound Tornado contract provided a thin layer of cheer in an often lacklustre stock market.
British Aerospace soared 18p to 253p. The shares have climbed from 165p this year as the fortunes of the group have been dramatically transformed.
The order for 48 Tornado aircraft also brought comfort to other aerospace groups. General Electric improved 6p to 290p and Smiths Industries 11p to 365p.
But, not surprisingly, BAe made the running. The group has already this year attracted a partner, Taiwan Aerospace, for its troublesome regional aircraft business and there are indications that its car side is pulling out of the doldrums.
Other Middle Eastern defence contracts are expected. And BAe is thought to be near to clinching a number of other lucrative aircraft orders, including what could be a pounds 1bn order from Indonesia.
But although 1993 has so far been a good year for BAe it has been a rotten one for Allied- Lyons as the market has fretted about a possible rights issue and the impact of the recession on its international spirits business.
Allied shares fell a further 11p (after 18p) to 578p. They have lost 65p this year. But the rights talk was denied by Allied. A spokesman said: 'It's a load of old cobblers.'
In the eyes of many, Allied, with Asda and Burton Group out of the way, is the most likely candidate to tap the market for more cash, with any fund-raising exercise accompanied by a significant acquisition.
Profit forecasts have been pulled back. Allied is now expected to produce about pounds 640m in the year ending next month. More than pounds 700m was suggested at one time.
Allied's power in the spirit market - it rates as one of the industry leaders - was at one time seen as a significant strength as the recessionary pinch tightened.
But spirit profits have not lived up to expectations with margins under pressure. Guinness and Grand Metropolitan have also felt the impact of the spirit slowdown.
There are now fears that the spirit importers could encounter increased tax impositions in the US as the Clinton administration wrestles with its inherited economic problems.
Grand Met shares fell 11p to 439p and Guinness, already unsettled by indications that Warren Buffett's stake is for sale, retreated 9p to 453p.
Lucas Industries, where takeover rumours continue to swirl, also welcomed the BAe success, drawing attention to its spin-off from the deal. The shares rose 6p to 149p in busy trading, with bid speculation providing most of the momentum.
In the past year, the shares have come from 77p. They are now just below their 1992/3 high. Lucas is clearly on bid alert. Many expect BTR, fresh from its successful absorption of Hawker Siddeley, to strike.
Oils were also firm. A US proposal for an oil import fee, setting a crude floor price of dollars 25 a barrel, provided the inspiration. British Petroleum shrugged off rights issue fears, rising 8p to 245.5p.
Armour Trust, the car accessory and confectionery group, edged ahead another 0.5p to 38.5p as Grand Central Investment Holdings confirmed its stake had been increased to 24 per cent.
The merchant bank Brown Shipley collapsed 16p to 35p on the possibility of a cut-price bid from its largest shareholder at 30p.
Medeva, the drugs group, put on 4p to 219p. Andrew Porter at Nikko Securities forecast a rapid profit advance. He is looking for pounds 35.5m last year, pounds 50m this year and pounds 60m, perhaps pounds 70m, next.
Shares ended the account on a drab note with the FT- SE 100 index closing 9.7 points down at 2,807.2. It has fallen each day since Tuesday's 63.8-point surge. The FT-SE 250 index was 8.7 down at 2,954.8. Trading was again busy with a 773.1 million-share volume. Bargains totalled 36,862.
Disappointing figures from Xerox, the US office equipment group, unsettled its UK partner, Rank Organisation. The shares fell 29p to 698p as the market fretted about their joint venture, Rank Xerox. Rank is thought to be near to completing more hotel sales. Even so, the leisure group seems unable completely to shake off the suspicion of a rights issue.
Frost Group, the garage chain refloated from the old Norfolk House, is handing out a two-for-one share bonus. The shares, sold off at 253p in October 1991, advanced 26p to a new peak of 570p. Frost has grown quickly and now has 136 sites. In its last half-year it doubled profits to pounds 2.6m and about pounds 5.8m is expected for the year, against pounds 2.5m.
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