At one time the FT-SE 100 index was down 14.1 points. Then came the decision to allow spirits, for once, to escape an excise duty increase. Immediately the three leading producers, Allied- Lyons, Grand Metropolitan and Guinness, strengthened, reducing the index fall to 3.1 at 2,919.3 by the close.
Government stocks, helped by the dividend changes, have been given a yield improvement over equities.
With banks free to pump up to pounds 15bn into gilts the market could move ahead, more than overcoming falls of up to pounds 1 during the Budget speech. The expected strength of gilts will, of course, do no harm to the Government's funding requirements.
Although equities are expected to fall some sectors should move ahead, perhaps strongly. Food manufacturers and retailers and publishers will express relief over the VAT decision, the petroleum revenue tax move will help the likes of British Petroleum and overseas earners will reflect the ACT changes.
Jerry Evans at NatWest Securities selected four blue chips as clear beneficiaries. BAT Industries and Cable and Wireless on their overseas earnings; British Petroleum (petroleum revenue tax) and J Sainsbury (no VAT on food).
But the market was disappointed that the hoped-for interest rate cut failed to materialise and remains concerned about the funding of the Government's debt. The delayed effect of many of the Budget measures could have a bearish impact.
The unchanged spirits tax, one of the main decisions announced while the stock market was open, lifted Allied 5p to 573p; Guinness 10p to 490p and allowed Grand Met to close unchanged at 476p.
There were even stronger gains among second liners. Burn Stewart rose 8p to 143p and Highland Distilleries 16p to 286p.
Invergordon Distillers, where American Brands sits on more than 40 per cent and is expected to resume takeover hostilities, put on 9p to 275p.
Breweries, with the duty increase less than many expected, joined in the fun. And with cider also suffering less than anticipated, HP Bulmer and Taunton Cider moved ahead.
Full details of the ACT and PRT changes were not known until after the market closed. But in after-hours trading BP rose 9p to 295p. Shell was up 2p at 580p.
Electricity shares were hit by the plans to impose VAT on domestic fuels. National Power fell 4p to 335p and PowerGen 4p to 336p. Among the distributors Eastern lost 9.5p to 468p, Midland 8p to 496p and Seeboard 7p to 506p.
BT rose 2p to 429p. The Budget moves are unlikely to improve the atmosphere for the sale of the Government's remaining shareholding, due soon.
Thorn EMI was firm. But it was one price movement that was not largely influenced by the Budget. Reports of an 11.8 per cent increase in US record sales last year lifted the shares 13p to 872p. Tate & Lyle, with sugar at a three-year high, gained 7p to 429p.
British Airways dipped 2p to 296p despite the USAir link. However BAA, the airports group, drew support from the view that the USAir associations should improve passenger traffic. With the Heathrow link adding to the cheer the shares ended 11p higher at 807p.
JA Devenish, the pub owner, jumped 12p to 278p. The activity stemmed from thoughts that Boddington Group, sitting on nearly 20 per cent of the capital, was planning to resume hostilities. Boddies, up 3p at 250p, mounted an unsuccessful bid in the summer of 1991.
Hammerson, the property group, remained in the takeover spotlight. The powerful ordinary shares climbed 15p to 402p and the restricted voting 'A' shares gained 5p to 366p.
Gains were also scored by some of the more hard-pressed property groups. Greycoat improved 2.5p to 14p and UK Land 6p to 26p.
Simon Engineering had a volatile session after the sharp profit downturn and failure to pay a final dividend. The shares, at one time down to 92p, closed up 1p at 114p. BM Group fell a further 3p to 51p following Monday's disposals.
The end of the bitter struggle for Owners Abroad left the unsuccessful bidder Airtours 11p lower at 327p. Owners fell 12p to 126p.
Whitegate Leisure gained a further 3p to 30p on its return to profits. European Leisure, also back in the black, rose 1p to 6.5p.
Avesco gained 6p to 72p. The TV and video group is thought to be near arranging a refinancing for its cash-hungry offshoot, VideoLogic.
Hi-Tec Sports, the sports goods group, edged ahead 1p to 49p. After the market closed it was announced that Sir Michael Edwardes, the former British Leyland chairman, and the banker Richard Fenhalls had resigned from the board.
In hesitant trading the FT-SE 100 index closed 3.1 points lower at 2,919.3. But the FT-SE 250 index rose 6.9 to 3,118.9, only 2.9 below its peak. Trading was for a Budget day typically quiet with turnover of 492 million shares and 32,193 bargains. Government stocks fell by up to pounds 1
Associated Nursing Services raised pounds 1.5m by placing 800,000 shares with institutions at 195p through the stockbroker Peel Hunt. The cash will probably help in the acquisition of Broadwater Homes, which owns two nursing homes managed by ANS. Broadwater is a business expansion scheme. ANS began as a BES in 1984. Its shares closed 8p higher at 198p.
Menvier-Swain, an emergency lighting group that has made a pounds 9m cash call, should achieve profits of pounds 7.35m this year and pounds 10.2m next, Credit Lyonnais Laing believes. It forecasts 1993 dividends of 11p improving to 13.5p. Although the shares have performed well the securities house believes 'there is still plenty of upside potential' from yesterday's 560p.Reuse content