London’s FTSE 100 rose on Wednesday as investors digested the U.S. government shutdown, with healthcare shares driving much of the upside following Pfizer’s drug-pricing agreement with Washington, which reduced policy uncertainty.
By 12:31 GMT, the FTSE 100 had gained 0.6%, while the British pound strengthened 0.5% versus the U.S. dollar to 1.35. In continental Europe, Germany’s DAX rose 0.3%, and France’s CAC 40 added 0.4%.
Healthcare sector surges on Pfizer deal
Healthcare companies were among the strongest performers, with AstraZeneca PLC (LSE:AZN) climbing 7.2%, Hikma Pharmaceuticals PLC (LSE:HIK) up over 5%, and GSK plc (LSE:GSK) gaining 2.9%, following the trend set by their European peers.
The rally comes after Pfizer Inc (NYSE:PFE) reached an agreement with President Donald Trump on Tuesday to lower Medicaid prescription drug prices in exchange for tariff relief. Shares of Pfizer surged 6.8% on the announcement.
European healthcare stocks also recorded notable gains. Ambu A/S (TG:547A) jumped 10%, Sartorius AG (EU:DIM) rose more than 11%, and Merck KGaA (NYSE:MRK) and Roche Holding AG (BIT:1ROG) added roughly 6.7% and 7%, respectively.
Other market movers
Shares of Greggs PLC (LSE:GRG) climbed over 7% after the bakery chain reported a 6.1% year-on-year sales increase for the 13 weeks ending September 27, with like-for-like sales in company-run stores up 1.5%. Year-to-date, total sales rose 6.7%, with like-for-like growth of 2.2%.
Conversely, Tate & Lyle PLC (LSE:TATE) shares dropped more than 10% after the food ingredients maker warned of declining full-year profit and revenue due to weaker demand in the Americas and heightened pressure in Europe. The company now expects revenue and EBITDA for the fiscal year ending March 31, 2026, to decrease by low single-digit percentages at constant currency.
Economic data
The S&P Global UK Manufacturing Purchasing Managers’ Index showed further deterioration in September, falling to a five-month low of 46.2 from 47.0 in August, marking the twelfth consecutive month below the neutral 50 threshold and signaling ongoing contraction in the sector.
UK house prices rose 0.5% in September, slightly surpassing expectations, after declining 0.1% in August, according to Nationwide Building Society.
Bank of England policymaker Catherine Mann commented on Wednesday that monetary policy remains accommodative relative to inflation and economic activity. In a Bloomberg TV interview, she said keeping interest rates unchanged is “appropriate for the current period,” while noting concerns over inflation expectations: “There is drift in inflation expectations, and that’s a very important ingredient in my thinking about the persistence of the inflation.”
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