MARKET REACTS.

Auckland Star, Volume LXIX, Issue 98, 28 April 1938, Page 7

MARKET REACTS.

BUSINESS IN LONDON.

Indications That Recovery Is

Now Under Way.

SIR JOHN SIMON SCORES. (Received 10.30 a.m.) LONDON, April 27. Stocks generally, and notably giltedged and oil, were marked down as a result of the Budget, though there is already some recovery from opening levels.

The Australian Associated Press financial writer finds that opinion in the City is divided on the wisdom of the Budget. While it is probably true to say that none like it, many believe it is a courageous effort to impress foreign opinion with Britain's financial stability and her capacity to meet even the heaviest rearmament burdens.

Moreover, critics overlook that Sir John Simon scored an important tactical point by. increasing income tax at a time when statistics show that company profits are still increasing.

..Another point in Sir John Simon's favour is that there are already signs that reliance on loans cannot be extended indefinitely. The fixed debt charge of £224,000,000, has proved insufficient despite the record low discount on Treasury bills.

A later message says that in contrast with last year the City lost no time in accommodating itself to the Budget. After the initial setback all markets regained firmness and closed the day with a number of impressive gains.

P. and O. rose 1/ on resumption of interim dividends. Gold shares continue in favour and oil stock is' also higher. Tea is unchanged as the duty has long been foreseen and discounted.

Industrials are mostly firm, as it is recognised the concession for extra wear

and tear on machinery offsets the in creased income tax

The firmness of the markets, in. face of the Budget, is regarded as a, very healthy sign and lends colour to the view that recovery is at last under way. a