Brown's been bullish for market mid-caps

It's odder still when you think that the FTSE 100 index, routinely used as a shorthand for the British stock market, is more international than the benchmark for any other market. None of the superheavyweight companies BP, Shell, HSBC, GlaxoSmithKline and Vodafone makes more than a fifth of its money here. Since they account for a third of the index, they should make the 100 a proxy for the world stock market.

This index is still below the peak reached on the last day of the last millennium, although in the Brown decade it has just about doubled, measured by total return in sterling.

On this reckoning, there's little to choose between the major markets except for Japan's poor performance..

The weak dollar has cut the gain on US shares held by British investors.

The reasons the 100 index is lower than it was seven years ago are wellrehearsed: the windfall tax on the utilities, the £5 billion a year bite out of pension funds and charities, the endless pettifogging rules and initiatives, the surprise tax increase on North Sea oil, and the drift from a low-tax country to a medium-tax one.

The confiscation of Railtrack shook confidence, and the ratcheting-up of pension promises produced something close to panic among the actuaries.

Many of these measures bear more heavily on smaller companies than on the giants, but the chart above shows a surprise; the FTSE 250 index, which because of its bigger weighting Mortality bonds: of domestic companies is in some ways a better reflection of the corporate health of UK Plc, has easily outperformed the 100 during the Brown decade. The all-share index, which embraces the whole market, has stuck closely to the 100, because of the hefty weighting of the biggest stocks (which don't appear in the 250).

When it comes to choosing where you should have put your money, it has paid to stick to basics. Thanks in part to a friendly tax regime, London is again the mining capital of the world, despite the lack of gold under the streets. The mining sub-sector has risen by 530% in the decade, with construction and materials up by 431%. Those Cool Britannia sectors, media and pharmaceuticals, have bonds: a done dismally, although neither has lost you money, as technology shares have done.

The very best performer is an industry which you'd think was on the verge of extinction, but tobacco has returned 716% to buyers on 1 May 1997. There may be more gains to come in the current market run.

Robert Parkes of HSBC, who provided these figures, remains resolutely bullish.

He sees the 100 index making up lost ground, and still predicts 7000 by the year-end, as the private-equity boys prime their financial guns and fire them at those mega-cap companies that have seemed to be too big to be taken over. For investors, perhaps the lucky Chancellor is going to be the lucky Prime Minister..