The Ofgas watchdog's strictures on storage and transport charges prompted British Gas to warn of a possible dividend freeze, sending its shares tumbling 17p to 271.5p.
Her gas approach unnerved other privatisation shares. Electricities ignored a London Electricity profits surge, suffering double-figure falls.
Waters, with Thames profits watered down by a pounds 35m restructuring bill, slipped lower - with Thames leading the way with a 10.5p fall to 470p.
The utilities retreat took the edge off what could have been a strong blue-chip performance. In the event the FT-SE 100 index struggled to a 6.2-point gain at 3,045.8.
Banks and drugs attempted to redress the balance. Hoare Govett, the securities house, was the banking inspiration. It lifted its estimates for Barclays' profits from pounds 1.4bn to pounds 1.6bn and from pounds 1.8bn to pounds 2.15bn.
Barclays rose 10p to 560p with National Westminster, up 10p to 474p, dragged higher.
Drugs were caught by what appears to be a more bullish approach to the sector by US investors. SmithKline Beecham, helped by Henderson Crosthwaite support, gained 13.5p to 419.5p, Wellcome 24p to 618p and Zeneca 19p to 727p, a two- day gain of 33p.
Glaxo, as its inspirational chairman Sir Paul Girolami announced his retirement, improved 22p to 685p. Sir Paul's departure could lead, it is felt, to a more active acquisition policy by the drugs giant.
The stock market was encouraged by the latest batch of economic statistics, regarded as non- inflationary. But activity was muted, with the one-day train strike reducing attendance. Even so, trading was not as thin as in some recent sessions.
But for the second day running it was a two-lane market. Much of the activity took place in blue chips. Many second liners were neglected, reflected by another poor showing by the supporting FT-SE 250 index, down 19 points at 3,559.7. It has fallen 36.1 in two days as the main index has risen 29.4.
Government stocks were firm, although early gains of up to pounds 1 were cut back. Shorts ended up to half a point higher.
Hanson, following an investment lunch at UBS, gained 3p to 255.25p and Lucas Industries, ahead of visits by fund managers and stockbrokers to its new disc brake factory, the largest in Europe, at Bouzonville, France, shaded 1p to 186p. The group has said sales gowth this year was 'robust'.
J Sainsbury put on 4p to 395p as NatWest Securities drew attention to its first new-style town centre store. Say NatWest: 'JS will roll out the format to other stores depending on the results of the pilot which, if the first day's trading is anything to go by, are likely to please'.
Tottenham Hotspur opened poorly but then achieved a strong comeback, ending unchanged at 80p. The shares, following the Football Association's far-reaching punishment, were down to 67p at the start of trading.
Poor figures put NFC, the transport group, in reverse - down 21p to 198p. Southern Business, the office equipment group, tumbled 32p to 42p on its 57 per cent profits setback.
Imperial Chemical Industries remained in the doldrums, with James Capel repeating its cautious stance. The shares fell 10p to 779p.
Pesistent rumours that Inchcape will bid for full control of Gestetner, the office equipment group, continued to circulate, lifting the shares 7p to 175p.
Building and related shares continued to feel the impact of the surprisingly sharp fall in construction orders. John Laing tumbled 10p to 292p and Hepworth 12p to 321p.
Hobson, the recently emerged food group, attracted attention. The shares, in active trading, ended at 23.5p, up 0.5p. But there were a number of big trades at 24p. There are stories that it plans to sell some of the bits and pieces it acquired with the Co-op food manufacturing side. A big seller was accommodated last week.
Body Shop International failed to respond to an upbeat trading message, with the shares closing 6p down at 242p.
Indications that The Limited, a US retailing group, is seeking a British partner to launch a competing chain of shops are undermining sentiment. It is widely suspected that Next, unchanged at 249p, will join forces with the Americans.
Blue chips and the rest turned in contrasting performances. The FT-SE 100 index gained 6.2 points to 3,045.8 but the FT-SE 250 index lost 19 to 3,559.7. Turnover was 562.8 million with 22,883 bargains. The account ends on Friday; settlement is on 27 June.
Smith New Court, the securities house, rose 4p to 369p. Year's results are due today and a spectacular performance is expected. Barclays de Zoete Wedd, one of the few to research SNC, is looking for pounds 60m, up from pounds 38.7m. But many believe the group will comfortably top the BZW estimate, perhaps reaching pounds 70m. There is also talk of a rights
Westminster Scaffolding stuck at 2.25p. It has completed its capital reshaping but its hoped-for recovery has been hit by the failure of one of its leading customers. Even so its scaffolding business is capturing new contracts. Westminster has issued 3 million shares to settle a bill for new scaffolding. Its last results, covering 14 months, showed a pounds 4.22m loss.
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