The blue-chip FTSE 100 was up 0.6%, with banks leading the gains with a 1.4% rise, while the domestically focussed FTSE 250 index inched 1.6% higher.
Facing intense political pressure to provide more support for billpayers coping with what political opponents and campaigners have called a cost-of-living crisis, British finance minister Rishi Sunak said energy firms were making extraordinary profits while Britons struggled.
Shares of power generators Drax, Centrica and SSE fell between 4.5% and 6.6%, while the wider utility stocks were down 4.1%.
"The Chancellor appears to have decided not to include the electricity generating sector in today's announcement, however in today's statement the door has been left open to them being included later in the year," said Michael Hewson, chief market analyst at CMC Markets.
Global oil majors BP and Shell, which are less affected by UK policy, were up more than 1% as they rebounded from session lows. [O/R]
"Big oil businesses slipped a touch in anticipation of the Chancellor's non-budget but dusted themselves off pretty quickly as it became apparent that the stick came along with a pretty big carrot," said Danni Hewson, financial analyst at AJ Bell.
Shares of BT tumbled 2.3% after it said Britain's business minister will launch a national security review of a deal by Altice founder Patrick Drahi to increase his stake in BT to 18%.
Water company United Utilities shares slid 6.6% after it warned of higher costs due to inflationary pressures.
Asset manager Intermediate Capital Group jumped 7.6%after it reported its full-year results.
Leading the midcap index higher, public services outsourcer Serco gained 9.8% as it boosted its annual profit outlook.
Chemicals maker Johnson Matthey Plc fell 3.6% after forecasting a 2022-23 operating profit at the lower half of market estimates, as supply disruptions due to China's coronavirus lockdowns and component sourcing from Ukraine hurt its auto customers.
(Reporting by Sruthi Shankar and Amal S in Bengaluru; editing by Uttaresh.V, Sriraj Kalluvila and Paul Simao)
By Sruthi Shankar and Amal S