Record-breaking run may stall as investors think again

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The Chancellor may have ended the stock market's record-breaking run - at least for the time being.

Although some sectors should benefit - drinks, leisure, insurances, utilities - the immediate impact of the Budget is unlikely to be positive.

An early and significant interest rate cut could wipe out the Budget disappointment. Some wondered about such a move today. But there are worries about sterling's reaction to cheaper money.

Shares, briefly at a new trading peak, fell back as the market closed. With government stocks unimpressed and the futures market moving sharply lower as the Chancellor sat down, they are likely to open lower today.

Trading, on the surface, was busy with Seaq putting volume at a heady 850.5 million shares. But the total was inflated by a string of bed-and- breakfast deals and the delayed reporting of some transactions.

Drink shares celebrated the freeze on beer tax and the cut in spirit duty. Bass and Scottish & Newcastle led brewers higher and Allied Domecq rose 11p to 510p. But cider makers were distinctly flat following the higher tax on strong cider. HP Bulmer fell 9p to 484p and Matthew Clark, taking in the Gaymer and Taunton brands, 21p to 626p. Merrydown lost 8p to 121p.

BAT Industries eased 6p to 563p on the tobacco increase and retailers showed signs of hesitancy, with Boots falling 14p to 576p, on the lack of Budget inspiration.

Insurances, hit in early trading, firmed towards the close on unchanged taxes and betting shares responded to the duty reduction.

Utilities rose on the absence of any "windfall" tax with London Electricity 13p higher at 923p. South Wales Electricity, ahead of the meeting with potential predator Welsh Water, rose 22p to 1,077p.

Abbey National, however, was the Budget day star, gaining 13p to 618p as three securities houses, James Capel, Panmure Gordon and UBS made encouraging noises.

Halifax's decision to convert from building society to bank and come to market was one factor behind Abbey's sudden appeal. Initially, Halifax is likely to be largely owned by private shareholders and institutions will have to bide their time, displaying patience, before they get their required shareholding.

It is felt that during this period Abbey, floated six years ago at 130p, will, in effect, be a Halifax "proxy" for frustrated institutions.

British Aerospace climbed above 800p, reaching an 801p peak, up 12p. Hopes of a significant contract with the United Arab Emirates fuelled the gain. Rolls-Royce, a likely beneficiary of any such deal, rose 6p to 175.5p.

Insurances in early trading were ruffled by cautious noises from Societe Generale Strauss Turnbull. Sun Alliance, an SGST sell, fell 6p to 392p and GRE, described as overvalued, recovered early losses to end unchanged at 264p.

Charter, the conglomerate, held at 805p after meeting Henderson Crosthwaite. The securities house regards the shares as a buy and also favours BTR and Wassall.

TI, the engineer, gained 12p to 453p. Capel enthusiasm helped with the stockbroker saying the group's earnings growth was "safer than that of the market as a whole". The profit forecast for next year is edged higher to pounds 212m and the following year's to pounds 250m.

Amstrad, the electrical group, was ruffled by cautious comments by chairman Alan Sugar, falling 16.5p to 266.5p. BSkyB, the satellite television group, gained 6p to a 408p peak following its near-monopoly on football through its Endsleigh TV deal.

London Clubs was helped along by Merrill Lynch support and continuing takeover speculation; the shares rose 11p to 419p. Rhino, the computer games retailer backed by US group Electronics Boutique, held at 16.5p. Its pounds 9m rights issue received a 91.46 per cent take-up. Merrill Lynch expects losses of pounds 6.6m this year, with a pounds 1.5m profit next year.

Cluff Resources fell 15p to 73p. Word went round that the hovering predator had decided to walk away. The goldminer has been in bid talks since early this month. Ashanti and the US Echo Bay are seen as the most likely bidders.

Alvis, the defence vehicle maker, motored 4p to 149p. Figures are due next week. More than pounds 8m is expected against pounds 5.8m last time.

Amec, the builder, held at 98p as unrequited bidder, the Norwegian Kvaerner group, lifted its stake to 15.3 per cent. YJ Lovell, up 2p at 22p, attracted attention with talk of a big buyer lurking. Scottish Amicable lifted its stake to almost 5 per cent.


r Dealings are due to start tomorrow in an unusual creation, Cash Converters. The group has operated in Australia for 10 years and is expanding aggressively in the UK and elsewhere. It is a franchise business, specialising in what is described as quality second-hand goods. The shares were placed by Henderson Crosthwaite at 24p, yielding almost 8 per cent.

r Tadpole, the beleaguered maker of high performance notebook computers due to report tomorrow, rose 7p to 89p. The loss could be somewhat bigger than expected, say pounds l0m against the predicted pounds 9.3m. But there are hopes any gloom will be short-lived, with news of sales progress and, perhaps, an announcement another computer group is taking a 25 per cent stake in the group.