LONDON (April 1): BATTERED, bewildered, a completely demoralised stock market plunged thousands of millions of pounds this week following Labour's so-called social budget.
Grim prospects of a further squeeze on company profits, bringing risk of liquidity problems, increased tax bills and a sharp fall in consumer sending all combined to make a bleak outlook for the market.
Fears another budget will bring more havoc kept buyers from all sections of the market except golds.
British Government stocks touched new lows while ordinary shares plunged to 12-year lows. Since the budget announcement the Financial Times industrial index has plunged nearly 30 points to 267.7 compared to 344 at the turn of this year. This means that since May 1972 small investors, such as unit trust holders, have seen their saving chopped in half.
Nearly GBP20,000 million were lost from the market value of ordinary share prices in British quoted companies last year, latest statistics issued by the stock exchange showed.
'This is by far the steepest and severest fall since the thirties,' one leading stockbroker said.
