Gilts, Industrials Move Ahead On London Market

Press, Volume CII, Issue 30051, 8 February 1963, Page 15

Gilts, Industrials Move Ahead On London Market

fN.Z. Press Association—Copyright)

. LONDON, February 7. The stock exchange began the second week of account with prices of both giltedged stocks and industrial shares moving ahead. The reaction, however, soon set in, for a period of quietness developed and the markets lost much of their postBrussels buoyancy. The resurgence which followed the breakdown of the Common Market negotiations finally appeared to have spent itself. Selling, however, has been, extremely slight and on the whole the tone has beensteady. An encouraging rise in gold figures and other economic pointers failed to arouse much interest although the news that naval orders were being given to

Tyneside produced good rises among shipbuilding firms. The relative stability of the market in face of the Common Market failure continues to surprise financial observers. They point out that far from registering disappointment investors are obviously relieved at the removal of the uncertainty and are now looking to the Chancellor to push on with his promised re-expansion programme.

Totting up just what the Chancellor has already achieved .they recall that at the beginning of October he announced that a further £7om public investment had been authorised, that another £42m post-war credits would be returned and that all restrictions on bank lending would be removed. Purchase Tax Cut

In the beginning of November he cut the purchase tax on cars from 45 to 25 per cent at a cost to the Exchequer of £ssm-£6om in the full year and then anticipating his Budget he increased investment allowances and made various improvements in depreciation allowances together expected to cost the Exchequer £llom annually. In January, as soon as the Christmas shopping season was over, he reduced to 25 per cent the purchase tax on all other goods in the 45 per cent, category, notably radio and television sets.

The bank rate was cut the next day to 4 per cent, its lowest level since 1958. At the end of the month came the announcement of higher social security benefits at a cost to the Exchequer of £4sm.

Since then there have been other minor and more specific measures and more still have been promised.