Equities up as budget fears recede

ANOTHER demonstration of the London equity market's resilience in the face of a volatile Wall Street saw share prices safely negotiate a squally start to the day and finish on a strong note.

The focus of attention shifted away from the recently buoyant financial areas of the market - the banks and insurances - and alighted on the utilities and oil sectors, both of which delivered exceptionally powerful performances. In the background to London's latest solid showing was the better mood in the City about the probable content maiden budget of the Chancellor, Mr Gordon Brown's maiden budget next Wednesday.

Dealers said they now expected the chancellor to remove the tax credit of dividends in a series of steps rather than at a stroke.

In addition, there were reports yesterday that the proposed windfall profits tax on the privatised utilities might be as low as £3 billion, compared with the £5 billion plus figure that had been commonly put forward in recent months.

Wall Street's latest erratic performance overnight, which saw the Dow Jones Industrial Average slide over 130 points before launching a strong rally to close down at around half that amount, provided London with food for thought at the outset.

Wall Street's uncertain opening yesterday afternoon took share prices off their best levels, but overall the equity market looked in reasonably good shape at the close.

Utilities occupied four out of the top five places in the FTSE 100 and six out of the top 10 places in the FTSE Mid250. Number one position in the 100 index was taken by BTR, lifted by talk of a broker recommendation.

Turnover at 6 p.m. was 885 million.